EXHIBIT 10.11
LONG BEACH MUNICIPAL AIRPORT
LEASE AGREEMENT
▇▇▇▇▇▇ LONG BEACH ASSOCIATES
a California Limited Partnership
"DEVELOPER"
BOARD OF WATER COMMISSIONERS
CITY OF LONG BEACH
"LANDLORD"
TABLE OF CONTENTS
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Page
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1. SUBJECT OF LEASE........................................................ 1
1.1 Purpose of Lease............................................... 1
1.2 Lease of Premises.............................................. 1
1.3 The Project Area............................................... 2
1.4 The Premises................................................... 2
1.5 Parties to the Lease Agreement................................. 2
1.5.1 Landlord............................................. 2
1.5.2 Developer............................................ 2
1.5.3 Association by Developer............................. 3
1.6 Existing Lease from the City of Long Beach..................... 4
2. TERM.................................................................... 4
2.1 Basic Term..................................................... 4
2.2 Options for Extensions......................................... 4
3. RENT.................................................................... 5
3.1 Minimum Ground Rent............................................ 5
3.1.1 Initial Ground Rent - Parcel A....................... 5
3.1.2 Initial Ground Rent - Parcel B....................... 6
3.1.2.1 Parcel A.......................................... 6
3.1.2.2 Parcel B.......................................... 6
3.1.2.3 CPI Adjustments to Initial
Ground Rent..................................... 7
3.1.2.4 Additional Adjustment to Initial
Ground Rent for Parcel B........................ 7
3.1.3 Commencement of Initial Ground Rent.................. 9
3.1.4 Phasing of Initial Ground Rent....................... 9
3.1.4.1 Parcel A.......................................... 10
3.1.4.2 Parcel B.......................................... 10
3.1.5 Delays in Commencement of Ground Rent............... 10
3.1.6 Due Dates and Place of Payment...................... 11
3.1.7 Ground Rent Credit for Extraordinary Costs.......... 11
3.1.7.1 Limitations....................................... 12
3.1.7.2 Approval of Costs................................. 12
3.2 Ground Rent Adjustments........................................ 13
3.2.1 Adjustment Dates..................................... 13
3.2.2 Ground Rent Adjustments by Appraisal................. 13
3.2.2.1 Adjustments for Off-Site Costs.................... 14
3.2.3 Appraisal............................................ 15
3.2.3.1 Prevailing Rate of Return......................... 16
3.2.4 Maximum Rent Increase................................ 17
3.2.4.1 Allocation to Parcels............................. 17
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3.2.4.2 Base Sublease Rental.............................. 17
3.2.4.3 Sublease Rental Percentage Change................. 18
3.2.4.4 Adjusted Ground Rent.............................. 18
3.2.4.5 Sale or Assignment of Leasehold Interest.......... 19
3.3 Ground Rent Adjustments Following Reconstruction............... 19
3.3.1 Ground Rent Adjustments.............................. 20
3.3.1.1 Adjustment Date................................... 20
3.3.1.2 Alternate Adjustment Date......................... 20
3.3.2 No Adjustment At Next Scheduled
Adjustment Date.................................... 20
3.3.3 Maximum Ground Rent Adjustment....................... 21
3.4 Adjustments to Ground Rent During Option Term.................. 21
3.5 Maximum Ground Rent Increase................................... 21
3.6 Definition of Offsite Costs.................................... 22
3.7 Approval of Improvement Plans.................................. 22
3.8 Determination of Offsite Costs................................. 22
3.9 Construction by Landlord....................................... 24
3.10 Phasing of Improvements........................................ 24
4. LEASEHOLD MORTGAGES..................................................... 24
4.1 Leasehold Mortgage Authorized.................................. 24
4.2 Notice to Landlord............................................. 24
4.2.1 Leasehold Mortgage Requirements...................... 24
4.2.2 Assignment of Leasehold Mortgage..................... 25
4.2.3 Landlord's Acknowledgment of Notice.................. 25
4.2.4 Developer to Provide Copies.......................... 26
4.3 Definitions.................................................... 26
4.3.1 Institutional Lender................................. 26
4.3.2 Leasehold Mortgage................................... 27
4.3.3 Leasehold Mortgagee.................................. 27
4.4 Consent of Leasehold Mortgagee Required........................ 27
4.5 Default Notice................................................. 27
4.6 Notice to Leasehold Mortgagee.................................. 28
4.6.1 Landlord's Termination Notice........................ 28
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(continued)
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4.6.2 Proper Address of Leasehold Mortgagee................ 30
4.7 Procedure on Default........................................... 30
4.7.1 Extension of Termination Notice Period............... 30
4.7.1.1 Payment of Monetary Obligations................... 30
4.7.1.2 Foreclosure of Leasehold Mortgage................. 31
4.7.2 Cure of Default...................................... 31
4.7.3 Compliance of Leasehold Mortgagee.................... 32
4.7.4 Leasehold Mortgage Not an Assignment................. 32
4.7.5 Obligation of Leasehold Mortgagee
to Repair or Reconstruct........................... 33
4.7.6 Leasehold to Mortgagee's Right to
Transfer........................................... 34
4.7.7 Leasehold Mortgagee Transfer a
Permitted Sale..................................... 34
4.8 New Lease...................................................... 34
4.8.1 Terms of New Lease................................... 34
4.8.1.1 Written Request to Landlord....................... 35
4.8.1.2 Payment of Obligations............................ 35
4.8.1.3 Remedy of Developer's Defaults.................... 36
4.8.1.4 New Lease to Have First Priority.................. 36
4.8.1.5 Developer's Obligations Under
New Lease....................................... 37
4.9 New Lease Priorities........................................... 37
4.10 Eminent Domain................................................. 37
4.11 Notice of Arbitration.......................................... 38
4.12 Amendment to Facilitate Leasehold Financing.................... 38
4.13 Security Deposit............................................... 38
4.14 Estoppel Certificate........................................... 39
4.15 Notices........................................................ 39
4.16 Erroneous Payments............................................. 40
4.17 Request for Notice for Benefit of Landlord..................... 40
4.18 Release or Forebearance........................................ 41
4.19 Notice......................................................... 41
4.20 No Merger...................................................... 41
4.21 No Payment by Landlord......................................... 41
4.22 Self Liquidating Mortgage...................................... 41
4.23 Leasehold Mortgagee Need Not Cure Specified Defaults........... 42
4.24 Casualty Loss.................................................. 42
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TABLE OF CONTENTS
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(continued)
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5. ASSIGNMENT AND SUBLETTING............................................... 42
5.1 Prohibition Against Change in Ownership,
Management and Control......................................... 42
5.1.1 Name and Address for Notices........................... 43
5.1.2 Type of Entity......................................... 43
5.1.3 Other Transfers........................................ 43
5.1.4 Buildings or Land...................................... 44
5.2 Assignments Not Subject to Approval.............................. 44
5.2.1 Death or Incapacity.................................... 44
5.2.2 Family Transfer........................................ 44
5.2.3 Affiliated Corporation................................. 44
5.2.4 IRS Transfer........................................... 45
5.2.5 Public Entity.......................................... 45
5.2.6 Partner................................................ 45
5.2.7 Comprising Entity...................................... 45
5.3 Assignment Invalid............................................... 46
5.4 Approval of Assignments.......................................... 46
5.4.1 Name................................................... 46
5.4.2 Description............................................ 46
5.4.3 Nature of Business..................................... 46
5.4.4 Financial Information.................................. 46
5.4.5 Officers............................................... 47
5.4.6 Additional Information................................. 47
5.4.7 Informational Purposes................................. 47
5.4.8 Confidentiality........................................ 48
5.4.9 Disapproval by Landlord................................ 48
5.5 No Release....................................................... 48
5.6 Unauthorized Change.............................................. 49
5.7 Subletting....................................................... 49
5.7.1 Minor Subleases........................................ 52
5.7.2 Consent to Sublease.................................... 52
5.7.2.1 Description......................................... 52
5.7.2.2 Name................................................ 52
5.7.2.3 Nature of Business.................................. 52
5.7.2.4 Financial Information............................... 52
5.7.2.5 Officers............................................ 53
5.7.2.6 Additional Information.............................. 53
5.7.2.7 Informational Purposes.............................. 53
5.7.3 Confidentiality........................................ 54
5.7.4 Disapproval by Landlord................................ 54
5.8 Sale of Buildings................................................ 55
5.9 Master Lease..................................................... 55
6. INDEMNITY, INSURANCE, CASUALTY DAMAGE................................... 55
6.1 Indemnification and Hold Harmless................................ 55
6.2 Insurance........................................................ 57
6.2.1 Liability Insurance..................................... 57
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(continued)
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6.2.2 Fire and Extended Coverage.............................. 58
6.2.3 Miscellaneous........................................... 61
6.2.4 Blanket Policies........................................ 62
6.2.5 Self-Insurance.......................................... 63
6.2.6 Insurance Adjustments................................... 63
6.3 Damage or Destruction............................................ 63
6.3.1 Restoration of Premises................................. 63
6.3.2 Right to Terminate...................................... 64
6.3.3 No Reduction in Rent.................................... 65
7. DEVELOPMENT OF THE PROJECT............................................. 65
7.1 Scope of Development............................................. 65
7.2 Developer's Obligation to Develop Premises....................... 66
7.2.1 Best Efforts to Sublease................................ 66
7.3 Architectural Approval........................................... 67
7.3.1 Restriction............................................. 67
7.3.2 Basic Concept Documents................................. 67
7.3.3 Landscaping............................................. 67
7.3.4 Exterior Elevations..................................... 68
7.3.5 Security and Security Plans............................. 68
7.3.6 Amendments.............................................. 69
7.3.7 Landlord Approval....................................... 69
7.3.8 Communication and Consultation.......................... 71
7.3.9 Requirements of Institutional
Lender or Major Occupant.............................. 71
7.3.10 Interior Improvements................................... 72
7.3.11 Modification of Plans................................... 72
7.4 Performance and Payment Bonds.................................... 73
7.4.1 Agreement to Provide.................................... 73
7.4.2 Term of the Bond........................................ 74
7.4.3 Penal Sum............................................... 74
7.4.4 Alternative Performance................................. 75
7.5 Construction..................................................... 75
7.5.1 Costs of Construction................................... 75
7.5.2 Right to Improve........................................ 75
7.5.3 Governmental Permits.................................... 76
7.5.4 Rights of Access........................................ 77
7.5.5 Local, State and Federal Laws........................... 77
7.5.6 Antidiscrimination During
Construction.......................................... 77
7.5.7 Responsibilities of Landlord............................ 78
7.5.7.1 Governmental Approvals............................. 78
7.5.7.2 Easements........................................... 78
7.5.7.3 Off-Site Improvements............................... 79
7.5.7.4 Bond Financing...................................... 79
7.5.7.5 Hazardous Materials................................. 80
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TABLE OF CONTENTS
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(continued)
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7.5.8 Responsibilities of Developer........................... 80
7.5.9 Maintenance............................................. 80
7.5.10 Acceptance of Premises.................................. 80
7.6 Subdivided Leases................................................ 81
7.6.1 Same Parties............................................ 82
7.6.2 Obligations of Subdivided Leases........................ 82
7.6.3 Terms, Covenants........................................ 82
7.6.3.1 Ground Rent......................................... 83
7.6.3.2 Improvements........................................ 83
7.6.3.3 Easements and CC & R's.............................. 83
7.6.3.4 Description of Property............................ 84
7.6.3.5 Excluded Matters.................................... 84
7.7 Combining Leases................................................. 84
7.7.1 Ground Rent............................................. 85
7.7.2 Easements and CC & R' s................................. 85
8. USE..................................................................... 85
8.1 Permitted Development............................................ 85
8.2 Vehicle Parking.................................................. 85
8.3 Federal Aviation Administration................................. 86
8.4 Inspection....................................................... 86
9. LIENS................................................................... 86
9.1 Developer's Responsibility....................................... 86
9.2 Notice of Work................................................... 86
9.3 Discharge of Liens............................................... 87
9.4 Landlord's Right to Pay.......................................... 87
9.5 Reimbursement of Landlord........................................ 88
10. CONDEMNATION............................................................ 88
10.1 Definition of Terms.............................................. 88
10.1.1 Total Taking........................................... 88
10.1.2 Partial Taking......................................... 89
10.1.3 Voluntary Conveyance................................... 89
10.1.4 Date of Taking......................................... 89
10.1.5 Leased Land............................................ 89
10.2 Effect of Taking................................................ 89
10.3 Allocation of Award............................................. 90
10.4 Reduction of Ground Rent on Partial Taking...................... 90
10.5 Temporary Taking................................................ 91
11. ALTERATIONS BY DEVELOPER................................................ 91
12. TAXES AND ASSESSMENTS................................................... 92
12.1 Payment by Developer............................................ 92
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(continued)
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12.2 Installment Payments............................................ 92
12.3 Proration....................................................... 93
12.4 Right to Contest................................................ 93
13. CERTIFICATES BY DEVELOPER AND LANDLORD.................................. 94
13.1 Developer to Provide............................................ 94
13.2 Landlord to Provide............................................. 95
14. QUIET ENJOYMENT......................................................... 95
15. TERMINATION AND FURTHER LEASING......................................... 96
15.1 Termination..................................................... 96
15.2 Termination by Developer........................................ 96
15.3 Termination by Landlord......................................... 96
16. SECURITY DEPOSITS....................................................... 97
16.1 Good Faith Deposit.............................................. 97
16.1.1 Receipt by Landlord................................... 97
16.1.2 Form of Deposit....................................... 97
16.1.3 Interest.............................................. 98
16.1.4 If Bond is Posted..................................... 99
17. GENERAL PROVISIONS...................................................... 99
17.1 Notices, Demands and Communication between
the Parties................................................... 99
17.2 Conflict of Interest............................................ 100
17.3 Enforced Delay: Extension of Time of Performance................ 101
17.4 Inspection of Books and Records................................. 101
17.5 Defaults and Remedies........................................... 102
17.5.1 Defaults - General.................................... 102
17.5.2 Institution of Legal Actions.......................... 102
17.5.3 Applicable Law........................................ 103
17.5.4 Service of Process.................................... 103
17.5.5 Rights and Remedies Are Cumulative.................... 103
17.5.6 Inaction Not a Waiver of Default...................... 103
17.5.7 Remedies.............................................. 104
17.5.8 Developer's Rights.................................... 105
17.5.9 Lease Termination..................................... 105
17.5.10 Landlord's Exercise of Remedies....................... 105
17.5.11 Payment to Developer.................................. 106
17.5.11.1 Reimbursement to Landlord........................ 107
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(continued)
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17.5.11.2 Reimbursement to Developer....................... 108
17.5.11.3 Ground Rent...................................... 108
17.5.11.4 Remaining Balance................................ 108
17.5.12 Delivery of Plans.................................... 109
17.6 Right to Contest Laws........................................... 109
17.7 Trade Fixtures.................................................. 110
17.8 Continued Possession of Developer............................... 110
17.9 Utilities....................................................... 111
17.10 Surrender....................................................... 111
17.11 Partial Invalidity.............................................. 111
17.12 Section Headings................................................ 112
17.13 Short Form Lease................................................ 112
17.14 Exhibits Incorporated........................................... 112
17.15 Entire Agreement, Waivers and Amendments........................ 112
17.16 Waivers......................................................... 113
17.17 Approvals....................................................... 113
17.18 Successors in Interest.......................................... 113
17.19 "And/Or"........................................................ 113
17.20 "Including" Defined............................................. 113
17.21 Right of First Refusal to Purchase.............................. 114
17.22 If Developer is a Trustee....................................... 115
17.23 Limitation of Liability of Partners............................. 115
17.24 Approvals....................................................... 116
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LIST OF EXHIBITS
First Appearing At
Ltr. Description Paragraph Page
---- -------------------- --------- ----
A Legal Description of Premises 1.2 1
B Site Map of Project Area 1.4 2
C Form of Nondisturbance 5.7 50
Agreement
D Form of Performance Bond and 7.4.1 73
Labor and Material Bond
E Form of Assignment 5.9 55
F Form of Short Form Lease 17.13 112
LEASE AGREEMENT
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THIS LEASE AGREEMENT (the "Lease") is made this 21st day of April, 1988,
by and between ▇▇▇▇▇▇ LONG BEACH ASSOCIATES, a California Limited Partnership,
hereinafter referred to as "Developer", and the BOARD OF WATER COMMISSIONERS OF
THE CITY OF LONG BEACH, acting for and on behalf of the City of Long Beach, a
municipal corporation, hereinafter referred to as "Landlord". Landlord and
Developer hereby agree as follows:
1. SUBJECT OF LEASE:
----------------
1.1 Purpose of Lease. The purpose of this Lease is to provide
----------------
for the lease and improvement of certain Premises, hereinafter described, as
("Project"). This Lease is entered into in order to develop the Project and not
for speculation in land holding. The development of the Project pursuant to and
as contemplated by this Lease is in the best interests of Landlord and in accord
with the public purposes and provisions of applicable State and local laws and
requirements under which the Project is to be undertaken.
1.2 Lease of Premises. Subject to the terms, covenants and
-----------------
conditions of this Lease, Landlord hereby leases to Developer and Developer
hereby takes and hires from Landlord that certain real property (the "Premises")
legally described on Exhibit "A" attached hereto and made a part hereof, upon
the terms and conditions hereinafter set forth. Parcel A and Parcel B described
in Exhibit A are hereinafter referred to as "Parcel A" and "Parcel B".
1
1.3 The Project Area. The area within which the Project is
----------------
located in the City of Long Beach is the area generally described as the area
bounded by Spring Street on the north, easterly of Redondo Avenue on the west
(adjacent to and easterly of certain retained property of Landlord), ▇▇▇▇▇▇
Airport Way on the south, westerly of the California National Guard facility on
the southeast, and westerly of ▇▇▇▇▇▇ Airport Way on the northeast.
1.4 The Premises. The Premises include those portions of the
------------
Project area illustrated and designated on the site map attached hereto as
Exhibit "B" and forming a part of this Lease and are legally described in the
attached Exhibit "A".
1.5 Parties to the Lease Agreement.
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1.5.1 Landlord. Landlord is the Board of Water
--------
Commissioners of the City of Long Beach acting for and on behalf of
the City of Long Beach, a municipal corporation organized and existing
under the laws of the State of California acting in its proprietary
capacity. The principal office of Landlord is located at ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The term "Landlord" as
used in this Lease includes the City of Long Beach, California, and
any assignee of or successor to its rights, powers and
responsibilities.
1.5.2 Developer. Developer is a California limited
---------
partnership having a principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. A written
agreement has been executed creating Developer ("Agreement
Establishing Developer")
2
an executed copy of which has been delivered to Landlord. Developer agrees, upon
request of Landlord, to provide Landlord with any amendments to the Agreement
Establishing Developer, so long as ▇▇▇▇▇▇ Long Beach Associates, a California
Limited Partnership, is the party acting as Developer under this Lease. The
provisions of the foregoing sentence shall apply to any entity becoming a
successor to Developer under this Lease or any other lease which may be
established pursuant hereto covering the Premises.
1.5.3 Association by Developer. Notwithstanding any other
------------------------
provisions hereof, Developer reserves the right, at its discretion, to join and
associate with other entities in joint ventures, partnerships or otherwise for
the purpose of leasing and developing the Premises, and Developer may assign
this Lease to any such entity, provided that Developer, or any partner of
Developer having a controlling interest in Developer, continues to manage and
retain policy control over the development and operation of the Premises, until
such time as Developer's interests under this Lease are assigned as permitted
under subsection 5.1, below. As used herein, "manage" shall mean to direct or
supervise the operation and execution of the development of the Premises and to
have authority to act for and bind the entity in all dealings with Landlord
under this Lease. This definition shall be deemed to require Developer to retain
policymaking authority.
3
1.6 Existing Lease from the City of Long Beach. Developer is the
------------------------------------------
lessee from the City of Long Beach, as Landlord, of certain real property
described in the Lease Agreement dated July 17, 1987 ("Existing City of Long
Beach Ground Lease"). A short form of the City of Long Beach Ground Lease was
recorded on November 15, 1986, as Instrument No. ▇▇-▇▇▇▇▇▇▇ in official records
of the Los Angeles County Recorder's Office. It is the intent of the parties
that this Lease Agreement be similar in form to the Existing City of Long Beach
Ground Lease and it is anticipated that in the future the two leases will be
combined into one lease for administrative convenience and continuity of
development by Developer, although neither party is obligated to so combine the
two leases. If the leases are combined into a single lease, commencement of
construction of improvements upon Parcel A would satisfy the obligation of
Developer under Section 3.1.1 of the Existing City of Long Beach Ground Lease
for commencement of construction upon at least one parcel each twelve (12)
months and the good faith deposit referred to in Section 16.1.1 of this Lease
would be returned to Developer.
2. TERM:
----
2.1 Basic Term. The term of this Lease shall commence on the
----------
date of execution of this Lease and shall continue thereafter for a period of
approximately forty-seven (47) years, expiring on July 17, 2035.
2.2 Options for Extensions. Subject to approval by the Board of
----------------------
Water Commissioners of the City of Long Beach and subject to the review by
Landlord of Lease provisions pursuant to Section 37380(b)(l) of the Government
Code, Developer
4
shall have an option for four (4) Lease extensions of ten (10) years each and a
final Lease extension of nine (9) years, so that the total possible duration of
this Lease will be ninety-seven (97) years. Developer may request at any time
that Landlord formally consider the granting of such Lease extensions, and
Landlord shall act upon such request within ninety (90) days after receipt
thereof. Any such request is to be made concurrently with a similar request
under the Existing City of Long Beach Ground Lease. If authority is not given
to exercise options to extend the term of this lease to July 17, 2084, Developer
shall have the option to extend the term of this lease to a total of fifty (50)
years. This latter option shall be exercised, if at all, in writing, prior to
the end of the term of the lease.
3. RENT:
----
3.1 Minimum Ground Rent. From commencement of the term of this
-------------------
Lease, the Ground Rent ("Ground Rent") payments shall be as follows:
3.1.1 Holding Rent. Developer shall pay a Holding Rent for
------------
Parcels A and B in the sum of Seventy-five Thousand and No/100 Dollars
($75,000.00) per year prorated for fractional years and any partial
month at the commencement of the term until August 31, 1989.
Developer shall pay Holding Rent for Parcels A and B of One Hundred
Thousand and No/100 Dollars ($100,000.00) per year for the period
5
commencing September 1, 1989, until commencement of payment of full Initial
Ground Rent. At such time as Initial Ground Rent has commenced for portions of
Parcels A or B, Holding Rent shall continue to be paid, on a prorated basis, for
the balance of Parcels A and B for which Initial Ground Rent has not commenced.
3.1.2 Initial Ground Rent. Initial Ground Rent for Parcels A and
-------------------
B shall be as follows:
3.1.2.1 Parcel A. The sum of One Hundred Eighty-Three
--------
Thousand Five Hundred Thirty-Eight and 75/100 Dollars ($183,538.75) per annum,
which is stated by the parties to be ten percent (10%) of the initial stated
value of the land included in Parcel A, which, in turn, is agreed by the parties
to be One Million Eight Hundred Thirty-Five Thousand Three Hundred Eighty-Seven
and 50/100 Dollars ($1,835,387.50). This amount was calculated by multiplying
146,831 square feet times $12.50 per square foot.
3.1.2.2 Parcel B. The sum of One Hundred Twenty-Nine
--------
Thousand Eight Hundred Forty-Five and 00/100 Dollars ($129,845.00) per annum,
which is stated by the parties to be ten percent (10%) of the initial stated
value of the land included in Parcel B, which, in turn, is agreed by the parties
to be One Million Two Hundred Ninety-Eight Thousand, Four Hundred Fifty and
00/100 Dollars ($1,298,450.00). This amount was calculated by multiplying
207,752 square feet times
6
$6.25 per square foot.
3.1.2.3 CPI Adjustments to Initial Ground Rent. The Initial
--------------------------------------
Ground Rent for Parcels A and B each shall be adjusted concurrently with the
commencement of such Initial Ground Rent in an amount equal to the increase in
the Consumer Price Index, Los Angeles - Long Beach area, all commodities,
occurring during the period between September 1986 and the month preceding the
month in which Initial Ground Rent commences for Parcels A and B, respectively.
This CPI adjustment is a one-time adjustment occurring only at the commencement
of Initial Ground Rent for Parcels A and/or B, and such adjustment shall not
exceed six percent (6%) per annum from September 1, 1986.
3.1.2.4 Additional Adjustment to Initial Ground Rent for
------------------------------------------------
Parcel B. The Initial Ground Rent for Parcel B has been determined on the basis
--------
that the major portion of Parcel B is subject to a "clear zone" restriction
imposed by the Federal Aviation Administration. Should this clear zone
restriction be removed or modified and should the City of Long Beach permit the
development upon Parcel B of additional office or other income-producing
buildings compatible with Developer's Basic Concept Documents referred to in
Section 7.3.2, and in excess of 1.2 million square feet, then
7
the Initial Ground Rent for Parcel B shall be adjusted to reflect the then fair
market value and prevailing rate of return of Parcel B. Fair market value for
this purpose shall be determined in the manner provided in sections 3.2.2 and
3.2.3, and in conformity with the following formula:
(square footage of )
(additional entitle- )
(ments for Parcel B ) x (H-L) + L =
___________________________
120,000
fair market value per square foot for Parcel B.
H = The greater of $12.50 per square foot value of Parcel A; or the
square foot value of Parcel A as adjusted under Section 3.1.2.3.
L = The greater of $6.25 per square foot value of Parcel B; or the
square foot value of Parcel B as adjusted under Section 3.1.2.3.
Provided that (1) no such adjustment to the Initial Ground Rent for Parcel B
shall be made under this Section 3.1.2.4 if Parcel B has been and remains
committed to surface parking or landscaping or other non-building purposes; and
(2) in any event, such Initial Ground Rent for Parcel B shall not exceed a
stated value of $12.50 per square foot and a return of 10%, except as may be
adjusted pursuant to Section 3.1.2.3.
8
3.1.3 Commencement of Initial Ground Rent. The obligation to pay
-----------------------------------
Initial Ground Rent shall commence as to Parcel A on the earlier of (a) the date
that construction commences on that parcel, or (b) September 1, 1992, subject to
granting of all required governmental approvals. The obligation to pay Initial
Ground Rent shall commence as to Parcel B on the earliest of (a) the date that
parking facilities are developed on the property, (b) at such time as
construction commences on that parcel, or (c) September 1, 1993. The
commencement of Initial Ground Rent for Parcel A pursuant to subparagraph (b)
above, and the commencement of Initial Ground Rent pursuant to subparagraph (c)
above, both shall be extended for so long as the California National Guard
remains in occupancy of Parcel 7 of Tentative Parcel Map No. 16960.
Construction shall be deemed to have commenced upon the date of issuance of a
foundation permit for the first building intended to produce revenue on any
given parcel ("Commencement of Construction"). Parcels A and B may be developed
in one or more increments prior to the above dates. In such instance, Initial
Ground Rent and Holding Rent shall be prorated accordingly.
3.1.4 Phasing of Initial Ground Rent. The Initial Ground Rent
------------------------------
due for each parcel shall be a sum equal to fifty percent (50%) of the Initial
Ground Rent attributable to such parcel. Payment
9
of Initial Ground Rent shall continue at that rate until the time set out below,
at which time the full Initial Ground Rent attributable to the Parcel shall
become payable. For convenience and ease of reference, at such time as Initial
Ground Rent has commenced to be paid in full it is hereinafter referred to as
Ground Rent.
3.1.4.1 Parcel A. The earliest of (a) six (6) months after
--------
issuance of an Initial Temporary Certificate of Occupancy of a building shell;
or (b) commencement of subtenant rent; or (c) sixteen (16) months after
commencement of Initial Ground Rent for the Parcel.
3.1.4.2 Parcel B. The earliest of (a) if there are no
--------
buildings on the Parcel, the date that parking and/or permanent landscaping
improvements covering more than twenty-five percent (25%) of the areas on the
Parcel are completed or put into use; or (b) six (6) months after issuance of an
Initial Temporary Certificate of Occupancy on a building shell; or (c)
commencement of subtenant rent; or (d) sixteen (16) months after commencement of
Initial Ground Rent for the Parcel.
3.1.5 Delays in Commencement of Ground Rent. Developer shall not
-------------------------------------
delay the commencement of payment of Initial Ground Rent for a parcel except to
the extent of delays incurred for reasons set out in subsection 17.3 which
render impossible or impractical
10
the construction upon said parcel. In such case, a delay in the commencement of
payment of Initial Ground Rent for Parcel A shall delay the commencement of
payment of Initial Ground Rent for Parcel B, for the same number of days that
Initial Ground Rent is delayed for Parcel A, unless the clear zone restriction
applicable to Parcel B has theretofore been eliminated.
3.1.6 Due Dates and Place of Payment. All Holding Rents and
------------------------------
Ground Rents described herein shall be payable in installments due the first day
of each month. Payment shall be made to the Water Department of the City of Long
Beach at the office of the General Manager, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Ground Rent installments will be deemed late on the tenth
(10th) day of the month and shall bear interest until the installment is paid at
the rate received by the City of Long Beach on its investment portfolio during
the preceding quarter, provided said interest rate shall not exceed twenty
percent (20%) per year.
3.1.7 Ground Rent Credit for Extraordinary Costs. Extraordinary
------------------------------------------
pre-development costs as specified in this Section may be recovered by Developer
by deducting such costs from all ground rent due (not Holding Rent), provided,
however, that Ground Rent shall not be reduced by such deductions to an amount
less than One Hundred Thousand and No/100 Dollars ($100,000.00) per year, and
such recovery of costs
11
pursuant to this Section shall not continue after December 31, 2002.
3.1.7.1 Limitations. Extraordinary costs recoverable
-----------
under this Section are limited to: (a) the actual direct cost of purchasing any
existing leasehold interests within the area of the Premises; (b) the actual
direct costs of demolishing and/or reconstructing any facilities of Landlord,
provided that the Landlord shall have the option of demolishing and/or
reconstructing such facilities at Landlord's expense; and (c) interest on items
(a) and (b) immediately above, calculated at the construction loan rate and
associated fees then being paid by Developer with respect to the Project. The
total interest to be paid shall not exceed a rate two percent (2%) above the
prime rate of Security Pacific National Bank, against such principal amount of
extraordinary pre-development costs and for such term as Landlord and Developer
shall agree upon. Should Landlord require that any replacement facilities be
greater in size or capacity than the facilities removed, then Landlord shall pay
the excess cost of the greater size or capacity, except to the extent such
additional size or capacity is required to serve the Developer's project.
3.1.7.2 Approval of Costs. At least 90 days prior to making
-----------------
any rent adjustments pursuant
12
to this Section, Developer shall submit to Landlord an itemized statement of
extraordinary costs incurred, and a schedule showing the proposed amounts of
rent credit to be taken. Said statement and schedule shall be subject to audit
by Landlord as to conformity with this Lease.
3.2 Ground Rent Adjustments.
-----------------------
3.2.1 Adjustment Dates. The fair market land value and
----------------
prevailing rate of return for each parcel shall be determined in the year 2000,
with respect to Ground Rent payable commencing January 1, 2001, and every five
(5) years thereafter, in the event construction commences on or before September
1, 1989, or for the first time in the year 2005 with respect to Ground Rent
payable commencing January 1, 2006, and every five (5) years thereafter in the
event construction commences after September 1, 1989, and the Ground Rent shall
be adjusted accordingly on the first (1st) day of each sixth (6th) year
thereafter. Said dates of adjustment of Ground Rent shall be referred to for
convenience as "adjustment dates".
3.2.2 Ground Rent Adjustments by Appraisal. With respect to each
------------------------------------
Ground Rent adjustment date, the fair market land value and prevailing rate of
return shall be determined by agreement between Landlord and Developer, but
should they not be able to agree at least two hundred ten (210) days prior to an
adjustment
13
date, then such fair market land value and prevailing rate of return shall be
determined by appraisal, according to Section 3.2.3, by an analysis of
comparable land transactions committed to the same usage and either zoned for or
improved with facilities of similar density and height considerations, and/or
such other appraisal method(s) recognized by the appraisal profession as are
appropriate for fair market land value appraisals and mutually agreed to by the
appraisers at time of reevaluation as being appropriate, recognizing market
conditions that prevail as of the date of value.
3.2.2.1 Adjustment for 0ff-Site Costs. The fair market land
-----------------------------
value (as agreed upon by Landlord and Developer or as determined by appraisal)
shall be adjusted (the "Adjusted Fair Market Land Value") in the proportion that
the stated value of the land included in Parcels A and B, as set forth in
Sections 3.1.2.1 and 3.1.2.2, bears to the sum of the original stated land value
of the land included in Parcels A and B, plus the actual cost of off-site costs
required by Landlord or the City of Long Beach as a precondition to the
development of Parcel A and/or Parcel B as defined in Section 3.6 and subject to
Sections 3.6 through 3.10. The Adjusted Fair Market Land Value shall be
converted into an annual Ground Rent obligation based on the prevailing rate of
return as determined pursuant to subsections 3.2.2 and 3.2.3.1. This adjustment
for off-site costs shall only apply
14
during the Basic Term of this Lease.
3.2.3 Appraisal. In the event the parties are unable to agree
---------
upon the fair market rental value or the prevailing rate of return or the method
of appraisal of the Premises at any adjustment date, the fair rental value of
the subject land and/or the prevailing rate of return shall be determined by
appraisals prepared by two appraisers, one appointed by the Landlord at its
expense and one appointed by the Developer at its expense, both of whom shall be
MAI members of the American Institute of Real Estate Appraisers or a successor
organization in the event the American Institute of Real Estate Appraisers
ceases to exist. Said appraisers shall be appointed not more than six (6) months
prior to the commencement of the rental adjustment period but, in any event,
within thirty (30) days after either party has given notice in writing of
inability to agree. Both appraisals must be completed and submitted to the
Landlord and Developer respectively within sixty (60) days after the appointment
of the appraisers. The two appraisals shall be averaged unless the higher of the
two appraisals exceeds the lesser by ten percent (10%) or more, in which case
the two appraisers shall appoint a third appraiser, also an MAI member of the
American Institute. In order to select such third appraiser, if the two
appraisers do not agree, the appraisers shall obtain a list of five appraisers
from the President of the American Institute
15
of Real Estate Appraisers and shall alternately strike names from such list
until one remains to become the third appraiser. The third appraiser shall be
appointed by the first two appraisers within fourteen (14) days after notice
from either of the parties to this Lease that the appointment of a third
appraiser is necessary. The cost of such third appraiser shall be shared equally
by the parties to this Lease. The third appraiser shall complete and submit the
required appraisal to both parties within sixty (60) days after appointment. All
appraisals shall be in the form of written reports supported by facts and
analysis. The two of the three appraisers arriving at values closest to each
other shall attempt to concur on a value. If they are unable to do so within
thirty (30) days, the two closest appraisals shall be averaged and that value
shall be the fair market value of the land or the prevailing rate of return, as
appropriate. The total appraised value of both parcels shall not exceed the
appraised value of the Premises. The Adjusted Fair Market Land Value shall be
converted into an annual Ground Rent obligation based on the prevailing rate of
return on similar ground leases then current in the market. Disagreements
between the two appraisers as to the method of appraisal shall be resolved by a
third appraiser, appointed in the manner described in this subsection.
3.2.3.1 Prevailing Rate of Return. As used in this Lease,
-------------------------
the term "prevailing rate of return"
16
shall mean the percentage of fair market value which is charged to lessee by
lessor in lease agreements for similar or comparable uses entered into or
renewed in the Los Angeles/Orange County urban area during the preceding twelve
months, which lease agreements are reasonably comparable in their terms to this
Lease.
3.2.4 Maximum Rent Increase. The increase, if any, in Ground Rent
---------------------
at the time of any adjustment date shall for Parcel A and B be limited to no
more than the increase in subtenant rents as described in this section:
3.2.4.1 Allocation to Parcels. The amount of Ground Rent
---------------------
attributable to each parcel shall remain in effect during the term of the Lease
unless parcel areas change.
3.2.4.2. Base Sublease Rental. The base sublease rental for
--------------------
each parcel shall be the total annualized rent, stabilized to exclude free rent,
reduced rent or excess tenant improvement amortization or other similar
concessions or considerations measured in the first year in which more than
eighty percent (80%) of the rentable space on a given parcel is rented, prorated
to full occupancy. If no improvements have been constructed upon Parcel B, then
Parcels A and B shall be considered as one parcel fox the purpose of this
Section 3.2.4 and the limitation upon increases in Ground Rent for both Parcels
A and B shall be the same percentage rate of rental increase
17
applicable to Parcel A.
3.2.4.3 Sublease Rental Percentage Change The sublease
---------------------------------
rental percentage change shall be determined by calculating the percentage
changes in sublease rental between the base sublease rental for Parcel A and B,
respectively, or for both Parcels A and B combined under the circumstances
described in subsection 3.2.4.2 above and the actual sublease rental due to
Developer for the same parcel or parcels in the full year preceding a Ground
Rent Adjustment date, stabilized to exclude any free rent, reduced rent or
excess tenant improvement amortization or other similar concessions or
considerations.
3.2.4.4 Adjusted Ground Rent. The "Adjusted Ground Rent"
--------------------
for each parcel (or for both Parcel A and B, if applicable) at any given
adjustment period shall be the lesser of the Adjusted Fair Market Rental Value
for such parcel as determined in subsection 3.2.2 above or the initial Ground
Rent for such parcel plus the product of the Sublease Rental Percentage Change
determined in subsection 3.2.4.3 above times the Ground Rent for such parcel or
both parcels, if Section 3.2.4.2 is applicable. To the extent that the Adjusted
Fair Market Rental Value is greater than the Adjusted Ground Rent, the
difference may be carried forward into the next five (5) year adjusted rental
period but not into any subsequent five (5) year adjusted rental periods, and
thereby recovered by
18
Landlord. The amount of Ground Rent during a five (5) year adjusted
rental period where there has been such a carry forward shall not
exceed one hundred ten percent (110%) of the fair market Ground Rent as
determined for that period.
3.2.4.5 Sale or Assignment of Leasehold Interest. Should
----------------------------------------
Developer sell, assign or otherwise transfer its leasehold interest to
an owner-user such that sublease rental is not paid to Developer, the
fair market sublease rental for such building, using the criteria and
methods set out in subsection 3.2.2, shall become the basis for
calculating the maximum rental adjustment using the process described
in 3.2.4.3 above.
3.3 Ground Rent Adjustments Following Reconstruction. Developer
------------------------------------------------
contemplates, pursuant to Section 11 hereof, that during the term of this Lease,
any or all of the buildings or other material improvements developed on the
Premises may be demolished and new buildings or other material improvements
constructed in their place in order to meet the then current market demand,
subject to Landlord approval pursuant to Section 7. In the event of such
demolition and new construction on either parcel, the provisions of subsection
3.2 shall be modified with respect to such parcel as set forth below in
subsections 3.3.1 and 3.3.2. This subsection 3.3 shall not apply to demolition
and new construction which is due to damage or destruction, as described in
subsection 6.3, where said new construction is
19
limited to one for one replacement of useable or rentable floor area in the same
general building configuration as that which previously existed.
3.3.1 Ground Rent Adjustments. Ground Rent for each parcel
-----------------------
(or both parcels together, if subsection 3.2.4.2 is applicable)
shall be adjusted according to the process set out in subsections
3.2.2 and 3.2.3 of this Lease.
3.3.1.1 Adjustment Date. The adjustment shall be effective
---------------
either six (6) months after issuance of an Initial Temporary
Certificate of Occupancy of the building shell or commencement of
subtenant rent, whichever occurs earlier; or
3.3.1.2 Alternate Adjustment Date. In the event a regular
-------------------------
five (5) year Ground Rent adjustment date for the parcel, as
established in subsection 3.2.1, occurs after commencement of
demolition of a building on said parcel and prior to completion of
construction of a new building in its place, said adjustment shall
take place on schedule and shall be based upon the assumption that
construction of the planned new building has been completed.
3.3.2 No Adjustment At Next Scheduled Adjustment Date.
-----------------------------------------------
There shall be no Ground Rent adjustment for such parcel at the next
scheduled adjustment date, but all subsequent Ground Rent adjustments
shall occur on the schedule set out in subsection 3.2.1.
20
3.3.3 Maximum Ground Rent Adjustment. For purposes of
------------------------------
determining the maximum Ground Rent increase under subsection 3.2.4 at the
time of the next Ground Rent adjustment and thereafter, the base sub-lease
rental described in subsection 3.2.4 shall be established with respect to
the new building or buildings constructed on the parcel (with Parcel A and
B to be considered together if subsection 3.2.4.2 is applicable).
3.4 Adjustments to Ground Rent During Option Term. At the commencement
---------------------------------------------
of each option term, and at the end of each five (5) years of each option term,
the Ground Rent shall be determined as provided in subsection 3.2.2, but with no
adjustment thereto as is provided in said subsection 3.2.2.1. The fair market
land value shall be converted into an annual Ground Rent obligation based on the
rate of return then current in the market for parcels which are currently and
fairly appraised.
3.5 Maximum Ground Rent Increase. However, the increase in Ground
----------------------------
Rent at the end of five (5) years of each option term shall be subject to the
provisions of subsection 3.2.4, with the first year of the option term as the
base period for determining sublease rental and the fifth (5th) year of the
option term being the adjustment year for determining actual rental received,
both to be stabilized to exclude any free rent, reduced rent, excess tenant
improvement amortization or other similar concessions or considerations. The
Ground Rent commencing the sixth (6th) year of any option term cannot increase
at a percentage rate greater than the percentage increase in sublease
21
rentals from the base year to the adjustment year.
3.6 Definition of Offsite Costs. For purposes of this Lease, Offsite
---------------------------
Costs shall include all costs actually incurred by Developer, which costs are
required by Landlord or the City of Long Beach as a precondition to the
development of Parcel A and/or Parcel B. Offsite Costs shall not include any
costs directly associated with the construction of buildings or parking upon the
Premises.
3.7 Approval of Improvement Plans. Prior to commencement of any
-----------------------------
construction of items identified in Section 3.6, Developer shall submit to
Landlord engineering plans and costs estimates for said items. Specifications
for all improvements shall meet the standard specifications of the City of Long
Beach for such improvements. Landlord shall review said plans for conformity
with the requirements of Landlord and/or the City of Long Beach and approve or
disapprove them as to such conformity in accordance with the procedures and
criteria set out in subsection 7.3.7.
3.8 Determination of Offsite Costs. Following receipts of bids, and
------------------------------
prior to the award of a contract for construction of items shown on the plans
approved pursuant to subsections 3.7 and 7.5.3 ("Approved Plans"), Developer
shall submit to Landlord all bids received and a statement indicating which bid
Developer intends to accept. The bid shall identify each item of cost in the
same manner as the estimate of costs submitted pursuant to subsection 3.7.
Landlord shall have the right to assert that any such item of cost is excessive
on the basis of Landlord's experience with comparable construction,
22
taking into consideration the total cost of the work, and Developer and Landlord
shall attempt to arrive at an agreed cost for said item. In the event Developer
and Landlord are unable to arrive at an agreed cost, then Developer and Landlord
shall accept the decision of a jointly appointed independent registered civil
engineer with experience in similar matters, who shall be directed to consider
the positions of both Developer and Landlord and to establish within five (5)
days, or such longer time as may be mutually agreed by Developer and Landlord,
the agreed cost for any contested items, again taking into consideration the
total cost of the work.
The actual bid cost, or the agreed cost, where the bid cost is
disputed, shall be deemed to be the actual cost of construction for each cost
item to the extent that such costs are actually incurred as a result of the
installation or construction of items or quantities of materials. Landlord
shall have the right to monitor the construction of all items included in the
Approved Plans to ensure that such construction is in accordance with the
Approved Plans and the approved costs. During the period of construction,
Landlord, through the Director of Public Works of the City of Long Beach, or the
General Manager of Landlord, and Developer may agree upon modifications to the
Approved Plans and to the bid costs or agreed costs as may be required by
unforeseen conditions.
Upon completion of construction, the aggregate of all costs which have
been approved by the operation of this subsection, and which are actually
incurred, less any costs paid by Landlord, shall become the amount of "Offsite
Costs" referred
23
to in subsection 3.2.2.1. Landlord shall have the right to audit and review all
contracts, invoices, payments, and other pertinent materials as may be necessary
to confirm the actual costs incurred.
3.9 Construction by Landlord. The City of Long Beach or Landlord
------------------------
shall design and install all traffic signals and modifications thereto if any
are included in the plans approved pursuant to subsection 3.7. Such
installation shall be paid for by Landlord or Developer, at Landlord's option.
All Offsite Costs shall be paid by Developer.
3.10 Phasing of Improvements. Developer shall have the right to
-----------------------
design and construct improvements in phases, in accordance with a phasing plan
which shall be approved by Landlord. Plans, estimates of costs, and bids for
phases of work shall be treated in the same manner as set out in subsections 3.7
through 3.9.
4. LEASEHOLD MORTGAGES:
-------------------
4.1 Leasehold Mortgage Authorized. On one or more occasions
-----------------------------
Developer may take back a Purchase Money Leasehold Mortgage upon a sale and
assignment of the Leasehold Estate created by this Lease or may mortgage or
otherwise encumber Developer's Leasehold Estate to an Institutional Lender (as
hereinafter defined), under one or more Leasehold Mortgages and assign this
Lease as security for such Mortgage or Mortgages.
4.2 Notice to Landlord.
------------------
4.2.1 Leasehold Mortgage Requirements. If Developer shall,
-------------------------------
on one or more occasions, take back a
24
Purchase Money Leasehold Mortgage upon a sale and assignment of the Leasehold
Estate or shall mortgage Developer's Leasehold Estate to an Institutional
Lender, and if the Holder of such Leasehold Mortgage shall provide Landlord with
notice of such Leasehold Mortgage together with a true copy of such Leasehold
Mortgage and the name and address of the Mortgagee, Landlord and Developer agree
that, following receipt of such notice by Landlord, the provisions of this
Section 4 shall apply in respect to each such Leasehold Mortgage.
4.2.2 Assignment of Leasehold Mortgage. In the event of any
--------------------------------
assignment of a Leasehold Mortgage or in the event of a change of address of a
Leasehold Mortgagee or of an assignee of such Mortgage, notice of the new name
and address shall be provided to Landlord within ten (10) days after completion
of such assignment.
4.2.3 Landlord's Acknowledgement of Notice. Landlord shall
------------------------------------
promptly upon receipt of a communication purporting to constitute the notice
provided for by subsections 4.2.1 or 4.2.2, above, acknowledge by an instrument
in recordable form receipt of such communication as constituting the notice
provided for by subsections 4.2.1 or 4.2.2, or, in the alternative, notify
Developer and the Leasehold Mortgagee of the rejection of such communication as
not conforming with the provisions of subsections 4.2.1 or 4.2.2, and specify
the specific basis of such rejection.
25
4.2.4 Developer to Provide Copies. After Landlord has received
---------------------------
the notice provided for by subsections 4.2.1 or 4.2.2 above, Developer, upon
being requested to do so by Landlord, shall within ten (10) days provide
Landlord with copies of the note or other obligation secured by such Leasehold
Mortgage and of any other documents pertinent to the Leasehold Mortgage as
specified by Landlord. If requested to do so by Landlord, Developer shall
thereafter also provide Landlord from time to time with a copy of each amendment
or other modification or supplement to such instruments. All recorded documents
shall be accompanied by the appropriate certification of the Custodian of the
Recording Office as to their authenticity as true and correct copies of the
official records and all non-recorded documents shall be accompanied by a
certification by Developer that such documents are true and correct copies of
the originals. From time to time upon being requested to do so by Landlord,
Developer shall also notify Landlord of the date and place of recording and
other pertinent recording data with respect to such instruments as have been
recorded.
4.3 Definitions.
-----------
4.3.1 Institutional Lender. The term "Institutional Lender" as used
--------------------
in this Section 4 shall refer to a savings bank, savings and loan association,
commercial bank, trust company, credit union, insurance company, college,
university, real estate investment
26
trust or pension fund. The term "Institutional Lender" shall also
include other lenders of substance which have assets in excess of Fifty
Million and No/l00 Dollars ($50,000,000.00) at the time the Leasehold
Mortgage is made.
4.3.2 Leasehold Mortgage. The term "Leasehold Mortgage" as
------------------
used in this Section 4 shall include a mortgage, a deed of trust, a
deed to secure debt, or other security instrument by which Developer's
Leasehold Estate is mortgaged, conveyed, assigned or otherwise
transferred, to secure a debt or other obligation.
4.3.3 Leasehold Mortgagee. The term "Leasehold Mortgagee"
-------------------
as used in this Section 4 shall refer to a holder of a Leasehold
Mortgage in respect to which the notice provided for by subsection 4.2
has been given and received and as to which the provisions of this
Section 4 are applicable.
4.4 Consent of Leasehold Mortgagee Required. No cancellation,
---------------------------------------
surrender or modification of this Lease shall be effective as to any Leasehold
Mortgagee unless consented to in writing by such Leasehold Mortgagee.
4.5 Default Notice. Landlord upon providing Developer any notice
--------------
of: (i) default under this Lease, (ii) a termination of this Lease, or (iii) a
matter of which Landlord may predicate or claim a default, shall at the same
time provide a copy of such notice to every Leasehold Mortgagee. No such notice
by Landlord to Developer shall be deemed to have been duly given unless and
until a copy thereof has been so provided to
27
every Leasehold Mortgagee having a lien upon the Premises. From and after the
date such notice has been given to a Leasehold Mortgagee, such Leasehold
Mortgagee shall have the same period, after giving of such notice upon it, for
remedying any default or acts or omissions which are the subject matter of such
notice or causing the same to be remedied, as is given Developer after the
giving of such notice to Developer, plus in each instance, the additional
periods of time specified in subsections 4.6 and 4.7 to remedy, commence
remedying or cause to be remedied the defaults or acts or omissions which are
the subject matter of such notice specified in any such notice. Landlord shall
accept such performance by or at the instigation of such Leasehold Mortgagee as
if the same had been done by Developer. Developer authorizes each Leasehold
Mortgagee to take any such action at such Leasehold Mortgagee's option and does
hereby authorize entry upon the Premises by the Leasehold Mortgagee for such
purpose.
4.6 Notice to Leasehold Mortgagee.
-----------------------------
4.6.1 Landlord's Termination Notice. Anything contained in
-----------------------------
this Lease to the contrary notwithstanding, if any default shall occur
which entitles Landlord to terminate this Lease, Landlord shall have
no right to terminate this Lease unless, following the expiration of
the period of time given Developer to cure such default or the act or
omission which gave rise to such default, Landlord shall notify every
Leasehold Mortgagee of Landlord's intent to so terminate ("Termination
Notice") at least thirty (30) days in advance of the
28
proposed effective date of such termination if such default is capable of being
cured by the payment of money ("Termination Notice Period"), and at least sixty
(60) days in advance of the proposed effective date of such termination if such
default is not capable of being cured by the payment of money (also a
"Termination Notice Period"). The provisions of subsection 4.7, shall apply if,
during such thirty (30) or sixty (60) day Termination Notice Period, any
Leasehold Mortgagee shall:
4.6.1.1 Notify Landlord of such Leasehold Mortgagee's desire
to nullify such notice; and
4.6.1.2 Pay or cause to be paid all Ground Rent, additional
rent and other payments then due and in arrears as specified in the Termination
Notice to such Leasehold Mortgagee and which may become due during such thirty
(30) or sixty (60) day Termination Notice Period; and
4.6.1.3 Comply or in good faith, with reasonable diligence
and continuity, commence to comply with all nonmonetary requirements of this
Lease then in default and reasonably susceptible of being complied with by such
Leasehold Mortgagee; provided however, that such Leasehold Mortgagee shall not
be required during such sixty (60) day Termination Notice Period to cure or
commence to cure any default consisting of Developer's failure to satisfy and
discharge any lien, charge or encum-
29
brance against the Developer's interest in this Lease or the Premises junior in
priority to the lien of the mortgage held by such Leasehold Mortgagee.
4.6.2 Proper Address of Leasehold Mortgagee. Any notice to be given
-------------------------------------
by Landlord to a Leasehold Mortgagee pursuant to any provision of this Section 4
shall be deemed properly addressed if sent to the Leasehold Mortgagee who served
the notice referred to in subsection 4.2.1 unless notice of a change of Mortgage
ownership has been given to Landlord pursuant to subsection 4.2.2.
4.7 Procedure on Default.
--------------------
4.7.1 Extension of Termination Notice Period. If Landlord shall elect
--------------------------------------
to terminate this Lease by reason of any default of Developer, and a Leasehold
Mortgagee shall have proceeded in the manner provided for by subsection 4.6, the
specified date for the termination of this Lease as fixed by Landlord in its
Termination Notice shall be extended for a period of six (6) months, provided
that such Leasehold Mortgagee shall during such six (6) month period:
4.7.1.1 Payment of Monetary Obligations. Pay or cause to be paid
-------------------------------
the Ground Rent, additional rent and other monetary obligations of Developer
under this Lease as the same become due, and continue its good faith efforts to
perform all of Developer's other obligations under this Lease.
30
4.7.1.2 Foreclosure of Leasehold Mortgage. If not enjoined or
---------------------------------
stayed, take steps to acquire or sell Developer's interest in this Lease by
foreclosure of the Leasehold Mortgage or other appropriate means and prosecute
the same to completion with due diligence.
4.7.2 Cure of Default. If at the end of such six (6) month period
---------------
such Leasehold Mortgagee is complying with subsections 4.7.1.1 and 4.7.l.2, this
Lease shall not then terminate, and the time for completion by Leasehold
Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee
is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee
proceeds to complete steps to acquire or sell Developer's interest in this Lease
by foreclosure of the Leasehold Mortgage or by other appropriate means with
reasonable diligence and continuity. Nothing in this subsection 4.7, however,
shall be construed to extend this Lease beyond the original term thereof as
extended by any options to extend the term of this Lease properly exercised by
Developer or a Leasehold Mortgagee in accordance with subsection 2.1, nor to
require a Leasehold Mortgagee to continue such foreclosure proceedings after the
default has been cured. If the default shall be cured and the Leasehold
Mortgagee shall discontinue such foreclosure proceedings, this Lease shall
continue in full force and effect as if Developer had not defaulted under this
Lease.
31
4.7.3 Compliance of Leasehold Mortgagee. If a Leasehold Mortgagee is
---------------------------------
complying with subsection 4.7.1 upon the acquisition of Developer's Leasehold
Estate herein by such Leasehold Mortgagee or its designee or any other purchaser
at a foreclosure sale or otherwise this Lease shall continue in full force and
effect as if Developer had not defaulted under this Lease.
4.7.4 Leasehold Mortgage Not an Assignment. For the purposes of this
------------------------------------
Section 4, the making of a Leasehold Mortgage issued by an institutional lender
shall not be deemed to constitute an assignment or transfer of this Lease or of
the Leasehold Estate hereby created, nor shall any Leasehold Mortgagee, as such,
be deemed to be an assignee or transferee of this Lease or of the Leasehold
Estate hereby created so as to require such Leasehold Mortgagee, as such, to
assume the performance of any of the terms, covenants or conditions on the part
of Developer to be performed hereunder, but the purchaser at any sale of this
Lease and of the Leasehold Estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignee or transferee of this
Lease and of the Leasehold Estate hereby created under any instrument of
assignment or transfer in lieu of the foreclosure of any Leasehold Mortgage
shall be deemed to be an assignee or transferee within the meaning of this
Section 4, and shall be deemed to have agreed to perform all of the terms,
covenants and conditions on the part
32
of Developer to be performed hereunder from and after the date of such purchase
and assignment, but only for so long as such purchaser or assignee is the owner
of the Leasehold Estate. Provided, however, that Developer shall, as to such
Leasehold Mortgagee, provide to Landlord the same information which Developer
must supply pursuant to this Lease as assignee.
4.7.5 Obligation of Leasehold Mortgagee to Repair or Reconstruct. If
----------------------------------------------------------
the Leasehold Mortgagee or its designee shall become holder of the Leasehold
Estate, and if the buildings and improvements on the Premises shall have been or
become materially damaged on, before or after the date of such purchase and
assignment, the Leasehold Mortgagee or its designee shall be obligated to
repair, replace or reconstruct the building or other improvements only to the
extent of the net insurance proceeds received by the Leasehold Mortgagee or its
designee by reason of such damage. However, should such net insurance proceeds
be insufficient to repair, replace or reconstruct the building or other
improvements to the extent required by subsection 6.3, and should the Leasehold
Mortgagee or its designee choose not to fully reconstruct the building or other
improvements to the extent required by subsection 6.3, such failure shall
constitute an event of default under this Lease which shall entitle Landlord to
commence proceedings to terminate the Lease.
33
4.7.6 Leasehold Mortgagee's Right to Transfer. Any Leasehold
---------------------------------------
Mortgagee or other acquirer of the Leasehold Estate of Developer pursuant to
foreclosure, assignment in lieu of foreclosure or other proceedings may, upon
acquiring Developer's Leasehold Estate, without further consent of Landlord,
assign the Leasehold Estate one time on such terms and to such persons and
organizations as are acceptable to such Mortgagee or acquirer and thereafter be
relieved of all obligations under this Lease; provided that such assignee has
delivered to Landlord its written agreement to be bound by all of the provisions
of this Lease. Any further attempts by the Leasehold Mortgagee to assign shall
comply with the provisions of this Lease relating to Assignment.
4.7.7 Leasehold Mortgagee Transfer a Permitted Sale. Notwithstanding
---------------------------------------------
any other provisions of this Lease, any sale of this Lease and of the Leasehold
Estate hereby created in any proceedings for the foreclosure of any Leasehold
Mortgage, or the assignment or transfer of this Lease and of the Leasehold
Estate hereby created in lieu of the foreclosure of any Leasehold Mortgage shall
be deemed to be a permitted sale, transfer or assignment of this Lease and of
the Leasehold Estate hereby created.
4.8 New Lease.
---------
4.8.1 Terms of New Lease. In the event of the termination of this
------------------
Lease as a result of Developer's
34
default Landlord shall, in addition to providing the notices of default and
termination as required by subsections 4.5 and 4.6, provide each Leasehold
Mortgagee with written notice that the Lease has been terminated, together with
a statement of all sums which would at that time be due under this Lease but for
such termination, and of all other defaults, if any, then known to Landlord.
Landlord agrees to enter into a new lease ("New Lease") of the Premises with
such Leasehold Mortgagee, or its designee for the remainder of the term of this
Lease, effective as of the date of termination, at the Ground Rent and
additional rent, and upon the terms, covenants and conditions, including all
first rights of refusal and options to renew or purchase, but excluding
requirements which are not applicable or which have already been fulfilled of
this Lease, provided:
4.8.1.1 Written Request to Landlord. Such Leasehold Mortgagee
---------------------------
shall make written request upon Landlord for such New Lease within thirty (30)
days after the date such Leasehold Mortgagee receives Landlord's Notice of
Termination of this Lease given pursuant to this subsection 4.8.
4.8.1.2 Payment of Obligations. Such Leasehold Mortgagee or its
----------------------
designee shall pay or cause to be paid to Landlord at the time of execution and
delivery of such New Lease, any and all sums which would at the time of
execution and delivery thereof be due pursuant to this Lease but
35
for such termination and, in addition thereto, all reasonable expenses,
including reasonable attorney's fees, which Landlord shall have incurred by
reason of such termination and the execution and delivery of the New Lease and
which would not otherwise have been received by Landlord from Developer or other
party in interest under Developer. In the event of a controversy as to the
amount to be paid to Landlord pursuant to this subsection 4.8.1.2, the payment
obligation shall be satisfied if Landlord shall be paid the amount not in
controversy, and the Leasehold Mortgagee or its designee shall agree to pay any
additional sum ultimately determined to be due plus interest at the rate set
forth in subsection 3.1.6, and such obligation shall be adequately secured.
4.8.1.3 Remedy of Developer's Defaults. Such Leasehold Mortgagee or
------------------------------
its designee shall agree to remedy any of Developer's defaults of which said
Leasehold Mortgagee is or may be notified by Landlord's Notice of Termination
and which are reasonably susceptible of being so cured by Leasehold Mortgagee or
its designee.
4.8.1.4 New Lease to Have First Priority. Any New Lease made
--------------------------------
pursuant to this subsection 4.8 and any Subdivided Lease entered into pursuant
to subsection 7.6 and any Single Lease entered into pursuant to subsection 7.7,
shall be prior to any
36
mortgage or other lien, charge or encumbrance on the fee of the Premises
and the Developer under such New Lease, Single Lease or Subdivided Lease,
as the case may be, shall have the same right, title and interest in and to
the Premises and the buildings and improvements thereon as Developer had
under this Lease.
4.8.1.5 Developer's Obligations Under New Lease. The Developer
---------------------------------------
under any such New Lease, Single Lease or Subdivided Lease shall be liable
to perform the obligations imposed on the Developer by such New Lease,
Single Lease or Subdivided Lease only during the period such person or
entity has ownership of such Leasehold Estate.
4.9 New Lease Priorities. If more than one Leasehold Mortgagee
--------------------
shall request a New Lease pursuant to subsection 4.8.1, Landlord shall enter
into such New Lease with the Leasehold Mortgagee whose mortgage is prior in lien
or with the designee of such Leasehold Mortgagee. Landlord, without liability to
Developer or any Leasehold Mortgagee with an adverse claim, may rely upon
mortgagee title insurance policy issued by a responsible title insurance company
doing business within the State of California as the basis for determining the
appropriate Leasehold Mortgagee who is entitled to such New Lease.
4.10 Eminent Domain. Developer's share, as provided by subsection
--------------
10.3, of the proceeds arising from an exercise of the power of Eminent Domain
shall, subject to the provision of such subsection 10.3, be disposed of as
provided for by any
37
Leasehold Mortgagee.
4.11 Notice of Arbitration. Landlord shall give each Leasehold
---------------------
Mortgagee prompt notice of any appraisal, arbitration or legal proceedings
between Landlord and Developer involving obligations under this Lease. Landlord
shall give the Leasehold Mortgagee notice of, and a copy of any award or
decision made in any such proceedings, which shall be binding on all Leasehold
Mortgagees.
4.12 Amendment to Facilitate Leasehold Financing. Landlord hereby
-------------------------------------------
agrees that if any Institutional Lender to whom Developer proposes to make a
Leasehold Mortgage on Developer's Leasehold Estate shall require as a condition
to making any loan secured by such mortgage that Landlord agree to modifications
of this Lease, then Landlord agrees that it will enter into an agreement with
Developer in recordable form making the modifications that are requested by such
lender, provided that such changes do not adversely affect any right of Landlord
under this Lease.
4.13 Security Deposit. If any Leasehold Mortgagee, its designee or
----------------
other purchaser has acquired the Leasehold Estate of Developer pursuant to
foreclosure, conveyance in lieu of foreclosure or other proceedings, or has
entered into a New Lease with Landlord in accordance with subsection 4.8, such
Leasehold Mortgagee, its designee or other purchaser shall succeed to the rights
of Developer, if any, in and to the security deposits paid by Developer to
Landlord pursuant to subsections 16.1 and 16.2. In such event, Developer shall
no longer have any rights to such security deposits, and Landlord shall hold
such security deposits
38
for and on behalf of such Leasehold Mortgagee, its designee or other purchaser.
4.14 Estoppel Certificate. Landlord shall at any time and from time
--------------------
to time hereafter, but not more frequently than twice in any one-year period (or
more frequently if such request is made in connection with any sale or
mortgaging of Developer's Leasehold Interest or permitted subletting by
Developer), within ten (10) days after written request of Developer to do so,
certify by written instrument duly executed and acknowledged to any Mortgagee or
purchaser, or proposed Mortgagee or proposed purchaser, or any other person,
firm or corporation specified in such request: (i) as to whether this Lease has
been supplemented or amended, and if so, the substance and manner of such
supplement or amendment; (ii) as to the validity and force and effect of this
Lease, in accordance with its tenor; (iii) as to the existence of any default
hereunder; (iv) as to the existence of any offsets, counter claims or defenses
hereto on the part of Developer; (v) as to the commencement and expiration dates
of the term of this Lease; and (vi) as to any other matters as may be reasonably
so requested. Any such certificate may be relied upon by Developer and any
other person, firm or corporation to whom the same may be exhibited or
delivered, and the contents of such certificate shall be binding on Landlord.
Any party requesting such estoppel certificate shall reimburse Landlord for its
costs and expenses incurred in issuing such certificate.
4.15 Notices. Notices from Landlord to the Leasehold Mortgagee
-------
shall be mailed to the address furnished Landlord
39
pursuant to subsection 4.2 , and those from the Leasehold Mortgagee to Landlord
shall be mailed to the address designated pursuant to the provisions of
subsection 1.5.1 hereof, attention the General Manager. Such notices, demands
and requests shall be given in the manner described in subsection 17.1 and shall
in all respects be governed by the provisions of that subsection.
4.16 Erroneous Payments. No payment made to Landlord by a Leasehold
------------------
Mortgagee shall constitute agreement that such payment was, in fact, due under
the terms of this Lease; and a Leasehold Mortgagee having made any payment to
Landlord pursuant to Landlord's wrongful, improper or mistaken notice or demand
shall be entitled to the return of any such payment or portion thereof provided
such Leasehold Mortgagee shall have made demand therefor not later than ninety
(90) days after the date of its payment.
4.17 Request for Notice for Benefit of Landlord. Immediately after
------------------------------------------
recording any Leasehold Mortgage encumbering Developer's Leasehold Estate,
Developer, at Developer's expense, shall cause to be recorded in the Office of
the Recorder of Los Angeles County, California, a written request of notice
under Section 2924(b) of the California Civil Code providing that a copy of any
notice of default and a copy of any notice of sale under such Leasehold Mortgage
shall be delivered to Landlord as provided for under said Section 2924(b) of the
California Civil Code. Such request shall be executed by Landlord.
Concurrently, with Developer's forwarding such notice for recordation, Developer
shall furnish to Landlord a complete copy of the Leasehold Mortgage and the note
secured thereby, together with the name and
40
address of the holder thereof. Said note and mortgage are to be kept by
Landlord on a confidential basis to the extent permitted by law.
4.18 Release or Forebearance. If any such lender shall fail or
-----------------------
refuse to comply with any and all of the conditions of this section, then and
thereupon Landlord shall be released from its covenant of forebearance with such
lender herein contained.
4.19 Notice. Landlord's obligation to observe its covenants of
------
forebearance in this section for the benefit of any lender on the security of
the Leasehold Estate, except as may be otherwise provided by law, shall be
conditioned upon there having been first delivered to the General Manager of the
Water Department of the City of Long Beach, a written notice of such encumbrance
which shall state the name and address of such lender for the purpose of
enabling notices to be given under subsection 4.2 above.
4.20 No Merger. No merger of Developer's Leasehold Estate into
---------
Landlord's fee title shall result by reason of the ownership of Landlord's or
Developer's estates by the same party or by reason of any other circumstances,
without the prior consent of any and all lenders on the security of the
Leasehold Estate.
4.21 No Payment by Landlord. Landlord shall not be required to
----------------------
execute any instrument which would obligate Landlord to the payment of any loan
or any part thereof.
4.22 Self Liquidating Mortgage. The Leasehold Mortgage shall be a
-------------------------
self liquidating mortgage, to be paid over a period not longer than elapses up
to three (3) years prior to the
41
end of the term of this Lease, or any option term if such option has been
exercised.
4.23 Leasehold Mortgagee Need Not Cure Specified Defaults. Nothing
----------------------------------------------------
herein contained shall require any Leasehold Mortgagee or its designee as a
condition to its exercise of right hereunder to cure any default of Developer
which cannot be cured by such Leasehold Mortgagee or its designee, in order to
comply with the provisions of subsections 4.6 or 4.7 or as a condition of
entering into the New Lease provided for by subsection 4.8.
4.24 Casualty Loss. A Standard Mortgagee Clause naming each Lease-
-------------
hold Mortgagee may be added to any and all insurance policies required to be
carried by Developer hereunder on condition that the insurance proceeds are to
be applied in the manner specified in this Lease and the Leasehold Mortgage
shall so provide, except that the Leasehold Mortgage may provide a manner for
the disposition of such proceeds, if any, otherwise payable directly to
Developer.
5. ASSIGNMENT AND SUBLETTING:
-------------------------
5.1 Prohibition Against Change in Ownership, Management and Control.
---------------------------------------------------------------
The qualifications and identities of Developer are of particular concern to
Landlord. It is because of those qualifications and identities that Landlord has
entered into this Lease with Developer. No voluntary or involuntary successor in
interest shall acquire any rights or powers under this Lease except as expressly
provided for in this Lease.
Except as otherwise permitted by this Section 5 and subsection 1.5.3,
Developer shall not permit any significant
42
change (voluntary or involuntary) in the ownership, management or control of
Developer to occur unless such change is approved by Landlord, subject to the
requirements of this section and reasonable conditions imposed by Landlord.
Except as otherwise permitted by this Section 5 and subsection 1.5.3,
Developer may not assign this Lease or any interest herein without first
obtaining the written consent of Landlord, pursuant to subsection 5.4 of this
Lease. Any assignee shall assume and agree to perform the obligations of
Developer under this Lease. Promptly following any permitted assignment,
Developer shall deliver to Landlord a copy of such assignment, together with a
statement setting forth the following information:
5.1.1 Name and Address for Notices. The name and address of the
----------------------------
assignee for the purpose of enabling notices to be given.
5.1.2 Type of Entity. Whether the assignee is an individual, a
--------------
corporation, a partnership or a joint venture, and if such assignee is a
corporation, the names of such corporation's principal officers and of its
directors and State of incorporation, and if such assignee is a partnership
or joint venture, the names and addresses of the general partners of such
partnership or venture.
5.1.3 Other Transfers. In the event that Developer is a partner-
---------------
ship, joint venture or corporation, any assignment of twenty-five percent
(25%) or more of the partnership or joint venture interest or outstanding
capital stock of such an entity shall con-
43
stitute an assignment by Developer of this Lease for the purposes of this
Section 5 and shall not be permitted to occur without first obtaining the
written consent of Landlord, which consent shall not unreasonably be
withheld, delayed or conditioned.
5.1.4 Buildings or Land. In addition to all other assignments,
-----------------
which must be approved in advance by Landlord, any assignment of 50,000
square feet of land or office space must be approved in advance by Landlord
5.2 Assignments Not Subject to Approval. The provisions of this
-----------------------------------
Section 5 shall not be applicable to the following types of assignments and
transfers, which shall be permitted without the prior consent of Landlord.
5.2.1 Death or Incapacity. Assignments resulting from the death or
-------------------
mental or physical incapacity of an individual, provided, however, that any
person replacing an individual who departs because of physical or mental
disability shall have education and experience comparable to that of the
person replaced.
5.2.2 Family Transfer. A transfer or assignment for the benefit of a
---------------
spouse, children, grandchildren or other family members.
5.2.3 Affiliated Corporation. A transfer to an "Affiliated
----------------------
Corporation" as hereinafter defined. An "Affiliated Corporation" shall be
(i) any corporation which owns fifty-one percent (51%) or more of the
outstanding capital stock of the assigning corporation; or (ii) any
corporation, fifty-one percent (51%) or more
44
of the outstanding capital stock of which is owned by the assigning
corporation; or (iii) any corporation, fifty-one percent (51%) or more of
the outstanding capital stock of which is owned by a shareholder or group
of shareholders who also owns at least fifty-one percent (51%) of the
outstanding capital stock of the assigning corporation.
5.2.4 IRS Transfer. A transfer of stock resulting from or in
------------
connection with a reorganization as contemplated by the provisions of the
Internal Revenue Code of 1954, as amended, or otherwise, in which the
ownership interests of a corporation are assigned directly or by operation
of law to a person or persons, firm or corporation which acquires the
control of the voting capital stock of such corporation or all or
substantially all of the assets of such corporation.
5.2.5 Public Entity. A transfer of stock in a publicly held
-------------
corporation or of the beneficial interest in any publicly held partnership
or real estate investment trust.
5.2.6 Partner. A transfer by a limited partner or joint venturer to
-------
a partnership or joint venture in which the assignor is a partner or
venturer.
5.2.7 Comprising Entity. A transfer or assignment from one partner
-----------------
or joint venturer comprising Developer to another; or if Developer is a
corporation from one shareholder to another.
45
5.3 Assignment Invalid. Any transfer or assignment to which
------------------
Landlord's consent is required by subsection 5.1 shall be void and shall confer
no right to occupancy upon the assignee unless and until such consent of
Landlord is obtained. Such approval may be conditioned or refused in response
to the matters specified herein.
5.4 Approval of Assignments. Landlord agrees that it shall consent to
-----------------------
an assignment to a subtenant and to an assignment which, at the time of such
assignment, is of such financial standing and responsibility as to give
reasonable assurance that the payment of all Ground Rent and other amounts
reserved in this Lease will be made in compliance with all the terms, covenants,
provisions and conditions of this Lease. In requesting an approval by Landlord
of assignment pursuant to subsection 5.1, Developer shall provide the following
information to Landlord with respect to proposed assignments of 50,000 square
feet of rentable building area or land area, or more, of sublease space, with
respect to any Ground Sublease and with respect to assignments of a parcel or an
interest in this Ground Lease.
5.4.1 Name. Name and address of the assignee.
----
5.4.2 Description. Description of the Premises to be assigned.
-----------
5.4.3 Nature of Business. The nature of the business conducted by
------------------
assignee on the Premises to be assigned.
5.4.4 Financial Information. Financial strength of the subtenant or
---------------------
assignee (if the subtenant is a publicly held company, a copy of its most
recent
46
annual report; if the subtenant or assignee will not disclose financial
information, a report from recognized credit rating agency, such as Dun &
Bradstreet).
5.4.5 Officers. The identity, background and experience of all
--------
officers and directors of assignee, at executive vice president level and
above and senior operational officer relating to the Premises, if a
corporation or general partners of a partnership or sole proprietor of a
proprietorship (Principals).
5.4.6 Additional Information. To the extent known by Developer, the
----------------------
following information:
5.4.6.1 Criminal record of the subtenant assignee or any of the
Principals.
5.4.6.2 Nature and extent of litigation to which the subtenant,
assignee or any Principal is a party.
5.4.6.3 Any course of conduct which a prudent person would deem
materially detrimental to the Project or to the intended use of the
Premises by the subtenant or assignee.
5.4.7 Informational Purposes. For informational purposes only:
----------------------
5.4.7.1 Number of anticipated employees of the assignee.
5.4.7.2 At the time of submission of the request, the terms and
conditions of the assignment.
5.4.7.3 With respect to all assignment copy thereof after
execution by all parties thereto.
47
5.4.8 Confidentiality. If requested by Developer at the time of
---------------
submission of the information described above, Landlord shall keep such
information and the identity of the proposed sublessee or assignee
confidential and Landlord shall execute a confidentiality statement so
providing to the extent Landlord is permitted by law to do so.
5.4.9 Disapproval by Landlord. Landlord reserves the right to
-----------------------
reject any proposed assignee where the matters specified in 5.4.3, 5.4.4,
5.4.5 or 5.4.6 above indicate that the presence of assignee would not be in
the public interest or would adversely affect the financial viability of
the Project. Landlord shall either approve or disapprove any proposed
assignee within fifteen (15) days after receipt by Landlord of a request to
do so. Failure of Landlord to act within said fifteen (15) days shall
constitute approval. If Landlord does not approve any proposed assignee,
Landlord shall state in writing the reasons for such disapproval. Developer
shall have the right to challenge the validity of such disapproval. No
damages shall be payable to Developer in any action arising from such
disapproval unless Landlord shall have acted unreasonably or in bad faith
or with actual malice.
5.5 No Release. Notwithstanding any assignment by Developer permitted
----------
by subsection 5.1 with Landlord's consent, and notwithstanding any assignment by
a partner or joint venturer of Developer permitted by subsection 5.1.3 with
Landlord's consent
48
or made without Landlord's consent pursuant to subsection 5.2, the assigning
party shall remain fully liable for the performance of all of the covenants to
be performed by Developer under this Lease prior to the effective date of such
assignment but Developer shall be released from liability with respect to the
performance of this Lease after the effective date of such assignment.
Landlord's approval of or consent to any such assignment or transfer shall not
be a waiver of any right to object to further or future assignments, and
Landlord's consent to each such successive assignment must be first obtained in
writing from Landlord unless otherwise permitted by this Lease without
Landlord's prioritsconsent.
5.6 Unauthorized Change. This Lease may be terminated by the Landlord
-------------------
if there is any significant change (voluntary or involuntary) other than those
authorized in Section 5 or subsection 1.5.3 hereof, or not requiring Landlord's
approval of ownership, management or control of the Developer prior to the
completion of the development of the site, unless such changes have been
approved by the Landlord.
5.7 Subletting. Developer shall be entitled, with the prior written
----------
consent of Landlord, to sublet the wits hole or any portion of the Premises or
the improvements constructed thereon by or under Developer and, without limiting
the foregoing, may establish a leasehold condominium regime on the Premises, or
portions thereof, in accordance with the provisions of California law, including
California Civil Code Sections 783 and 1350-1360. Developer shall, at all times,
remain liable for the performance of all of the covenants on its part to be so
performed, notwith-
49
standing any subletting. Each sublease shall be subject and subordinate not
only to this Lease, but also to any New Lease made by Landlord as provided in
Section 4.8 above. If the term of this Lease shall end while any such sublease
is in effect, Landlord may, at its option, for a period of ninety (90) days
thereafter, either terminate the said sublease or succeed to all of the rights
of Developer thereunder. Where any sublease which is consistent with this Lease
is approved, Landlord may grant to the subtenant, under such an approved
sublease entered into in good faith and for reasonable consideration, a right of
quiet enjoyment in recordable from (a "nondisturbance agreement") during the
term of the sublease, notwithstanding the expiration, termination or
cancellation of this Lease; provided that (i)) the term of the sublease, plus
extension or renewal options, does not extend beyond the term of this Lease,
plus extension options; (ii) such subtenant agrees that in the event this Lease
expires, terminates or is cancelled during the term of the sublease, the
sublease shall be deemed a direct lease between Landlord and such subtenant and
the subtenant shall attorn to Landlord. In the event that Landlord objects to
any proposed nondisturbance agreement or sublease, Landlord agrees to notify
Developer in writing of such objection and of its reasons for such objection
within twenty (20) days of its receipt of the proposed nondisturbance agreement
and sublease. Subject to the foregoing provisions of this subsection 5.7,
Landlord hereby approves generally of the form of nondisturbance agreement
attached hereto as Exhibit "C". Any approvals or grants of quiet enjoyment given
or made by Landlord pursuant to this subsection 5.7 shall be binding upon Land-
50
lord, its successors or assigns, including without limitation any person or
entity succeeding to the interest of Landlord by way of judicial foreclosure or
trustee sale proceedings pursuant to any mortgage or deed of trust, the lien or
charge of which is subject and subordinate to this Lease.
Any sublease, with respect to which Landlord agrees to execute a nondisturbance
agreement pursuant to this subsection 5.7, may be a sublease pursuant to which
the subtenant is responsible for the construction of the building improvements
upon the subleased premises (a "Ground Sublease" herein). Any Ground Sublease
may contain a hypothecation provision similar to Section 4 of this Lease for the
benefit of the holder of any mortgage or deed of trust constituting a lien on
the subleasehold estate created by virtue of the Ground Sublease. Any
nondisturbance agreement executed and delivered by Landlord for the benefit of
the sublessee under a Ground Sublease shall specifically recite that it is for
the benefit of any such holder of a deed of trust or mortgage constituting a
lien on the subleasehold estate created by such Ground Sublease; that the term
"sublease" as used in the nondisturbance agreement shall be deemed to include
any new sublease executed and delivered to any such holder of a first deed of
trust or first mortgage following a termination of the sublease pursuant to a
provision in the sublease similar to subsection 4.8 of this Lease, and that the
term " sublessee" under the nondisturbance agreement shall be deemed to include
any encumbrancer or other party succeeding to the sublessee under the Ground
Sublease by virtue of judicial or private power of sale foreclosure proceedings
or by delivery of an assignment in lieu
51
of foreclosure, or otherwise. Where Landlord agrees to execute a nondisturbance
agreement for the benefit of the sublessee under any Ground Sublease, such
agreement shall be subject to the obligations of the sublessee thereunder being
no less than the obligations of the Developer hereunder with respect to the
subleased premises.
5.7.1 Minor Subleases. Consent of Landlord shall not be required
---------------
to a sublease of any unit of space smaller than 50,000 square feet, not
including parking areas; however, notice of any such sublease shall be sent
to Landlord's Airport Manager within ten (10) days of the execution of the
sublease.
5.7.2 Consent to Sublease. Prior to review of any proposed
-------------------
sublease, the following information and assurances shall be provided to
Landlord as part of the request for consent to proposed subleases of 50,000
square feet of rentable building area, or more, of sublease space, with
respect to any Ground Sublease:
5.7.2.1 Description. Description of the sublease Premises.
-----------
5.7.2.2 Name. The name and address of the sublessee for the
----
purpose of enabling notices to be given under subsection 17.1
hereof.
5.7.2.3 Nature of Business. The nature of the business
------------------
conducted on the sublease Premises.
5.7.2.4 Financial Information. Financial strength of the
---------------------
subtenant or assignee (if the subtenant is a publicly held company,
a copy of its
52
most recent annual report; if the subtenant or assignee will not
disclose financial information, a report from a recognized credit
rating agency, such as Dun & Bradstreet).
5.7.2.5 Officers. The identity, background and experience of
--------
all officers and directors of sublessee, at executive vice president
level and above and senior operational officer relating to the
Premises, if sublessee is a corporation, general partners of a
partnership or sole proprietor of a proprietorship (Principals).
5.7.2.6 Additional Information. To the extent known by
----------------------
Developer, the following information:
5.7.2.6.1 Criminal record of the subtenant, assignee or any of
the Principals.
5.7.2.6.2 Nature and extent of litigation to which the
subtenant, assignee or any Principal is a party.
5.7.2.6.3 Any course of conduct which a prudent person would
deem materially detrimental to the Project or to the intended use of
the Premises by the subtenant or assignee.
5.7.2.7 Informational Purposes. For informational purposes
only: ----------------------
5.7.2.7.1 Number of anticipated employees of the subtenant or
assignee.
5.7.2.7.2 At the time of submission of
53
the request, the terms and conditions of the sublease or assignment.
5.7.2.7.3 With respect to all subleases and assignments a copy
thereof after execution by all parties thereto.
5.7.2.7.4 Any proposed nondisturbance or attornment
agreements.
5.7.3 Confidentiality. If requested by Developer at the time of
---------------
submission of the information described above, Landlord shall keep such
information and the identity of the proposed sublessee or assignee
confidential and Landlord shall execute a confidentiality statement so
providing, to the extent Landlord is permitted by law to do so.
5.7.4 Disapproval by Landlord. Landlord reserves the right to
-----------------------
reject any proposed sublessee where the matters specified in 5.7.2.3,
5.7.2.4, 5.7.2.5 or 5.7.2.6 above indicate that the presence of sublessee
would not be in the public interest or would adversely affect the financial
viability of the Project. Landlord shall either approve or disapprove any
proposed sublessee within fifteen (15) days after receipt by Landlord of a
request to do so. Failure of Landlord to act within said fifteen (15) days
shall constitute approval. If Landlord does not approve any proposed
sublessee, it shall state in writing the reasons for such disapproval.
Developer shall have the right to contest such disapproval. No damages
shall be payable
54
to Developer in any action challenging such disapproval unless Landlord
shall have acted unreasonably, in bad faith or with actual malice.
5.8 Sale of Buildings. Developer shall have the right to sell
-----------------
buildings constructed pursuant to the terms of this Lease, provided, however,
that such buildings shall be and remain subject to the terms and conditions of
this Lease. No sale of such buildings shall be valid unless this requirement is
expressly included in the deed as a covenant running with the land.
5.9 Master Lease. Landlord agrees to assign, and Developer agrees to
------------
accept, all rights and obligations of Landlord with respect to the existing
three (3) leaseholds at the Premises, pursuant to the form of assignment
attached hereto and marked Exhibit "E". Developer will hold Landlord and the
City of Long Beach, and all of their officers and employees, free and harmless
from any cost, expense, damage or claim of damage, including costs of defense,
arising from the interests or asserted interests of the existing tenants of any
such assigned leaseholds arising subsequent to the date of the assignment.
Landlord shall hold Developers free and harmless from any cost, expense, damage
or claim of damage including costs of defense, arising from acts or events
occurring prior to the date of such assignment, unless such damage or claim of
damage is caused or alleged to be caused by the assignment or any related
transaction.
6. INDEMNITY, INSURANCE, CASUALTY DAMAGE:
-------------------------------------
6.1 Indemnification and Hold Harmless. Developer expressly
---------------------------------
agrees to defend, protect, indemnify and hold harmless
55
the Landlord, its officers, agents and employees free and harmless from and
against any and all claims, demands, damages, expenses, losses or liability of
any kind or nature whatsoever which Landlord, its officers, agents or employees
may sustain or incur or which may be imposed upon them or any of them for injury
to or death of persons or damage to property arising out of or resulting from
the alleged acts or omissions of Developer, its officers, agents or employees or
in any manner connected with this Lease or with the occupancy, use or misuse of
the Premises by Developer, its officers, agents, employees, subtenants,
licensees, patrons or visitors. Developer also agrees to defend at its own
cost, expense and risk all claims or legal actions that may be instituted
against Developer or Landlord with respect to the Premises, and the design and
construction of off-site improvements except traffic signals, and Developer
agrees to pay settlements and to satisfy any judgment that may be rendered
against either Developer or Landlord as a result of any injuries or damages
which are alleged to have resulted from or be connected with this Lease or the
occupancy or use of the Premises by Developer or its officers, agents,
employees, subtenants, licensees, patrons or visitors. Nothing herein shall be
deemed to require Developer to indemnify Landlord for liability determined by a
court of law to have arisen from negligence of Landlord, provided, however, that
as between the parties to this Lease, in any matter in which the doctrine of
joint and several liability applies, Landlord shall not be required to pay any
larger share of such judgment than its actual contribution as determined by the
Court.
56
6.2 Insurance.
---------
6.2.1 Liability Insurance. At all times during the term of
-------------------
this Lease, Developer shall obtain and maintain or cause to be
obtained and maintained bodily injury and property damage insurance
by a combined single limit policy in an amount of at least Ten
Million Dollars and No/100 ($10,000,000.00) naming the Landlord and
its officers, agents and employees as coinsureds with Developer and
others designated by Developer. Developer shall also maintain
workers' compensation insurance in the amount required by statute.
Prior to entry upon the Premises, and upon each insurance
renewal, Developer shall deliver the policies of insurance required
by this subsection 6.2, or certified photostatic copies thereof, to
Landlord for approval within 30 days as to sufficiency and for
approval as to form by the City Attorney. When said policies of
insurance have been so approved, Developer shall substitute a
certificate of insurance issued by the insurance company or
companies issuing such policies certifying that said insurance
coverage is in full force and effect and upon the filing of said
certificate, the policies will be returned by Landlord to Developer,
if Developer has deposited the original policies with Landlord. Said
liability and property damage insurance policy shall contain a
provision or endorsement substantially as follows:
57
"The inclusion hereof of any person or entity as an insured
shall not affect any right such person or entity would have
as a claimant hereunder if not so included. This insurance
shall be primary and not contributing with any other
insurance maintained by Landlord."
Notwithstanding any other provision to the contrary contained
in this Lease, Developer shall not have the right to enter upon the
Premises for any purpose whatsoever until such certificate has been
filed with Landlord.
6.2.2 Fire and Extended Coverage. Developer shall, at no
--------------------------
cost or expense to Landlord, keep insured for the benefit of
Developer and Landlord, and such other parties, having an insurable
interest, as Developer may designate, the improvements constructed
by or under Developer upon the Premises against loss or damage by
fire and lightning and risks customarily covered by extended
coverage endorsement, in amounts not less than one hundred percent
(100%) of the actual replacement cost of said improvements, except
that Developer, at Developer's option may exclude the cost of
excavations, foundations and footings. Landlord shall be named as an
insured under any such policy. Such fire and extended coverage shall
also be required to be furnished by Developer during the
construction of improvements on the Premises as contemplated by
Section 7 below. Any loss payable under such insurance shall be
payable to
58
Developer, Landlord and such other parties having an insurable
interest in the property as Developer may designate and may be
endorsed with a standard mortgagee's loss payable endorsement in
favor of the holder of any Leasehold Mortgagee holding a Leasehold
Mortgage. Landlord will release the entire sum of the proceeds to
Developer or to a lender for purposes of reconstruction, replacement
or repair of any damaged improvement. The proceeds of such insurance
shall be paid to Developer to the extent the amount of the recovery
is for damages to interior, non-structural or subtenant
improvements, equipment, fixtures, personal property or for rental
value insurance to the extent such recoveries are separate
identifiable items. If Developer shall within five (5) years after
such damage or destruction commence construction of the damaged or
destroyed building, or a new building in accordance with Section 7
hereof, the proceeds of any insurance payable by reason of such
damage or destruction shall be paid to Developer. If Developer shall
fail to commence such construction within such five (5) year period
Landlord reserves the right to receive such portion of the insurance
proceeds so that Landlord may, if appropriate, carry out such
reconstruction of the destroyed building, with all excess amounts to
Developer. If at any time during the last five (5) years of the term
of the Lease whether the original term or any extension thereof, a
building then on the Premises shall be so
59
damaged by fire or other casualty that the cost of restoration shall
exceed fifty percent (50%) of the replacement value thereof,
exclusive of foundations, immediately prior to such damage, either
party hereto may, within sixty (60) days of such damage, give notice
of its election to terminate this Lease with respect to the parcel
upon which the building is located and, subject to further
provisions of this subsection this Lease shall cease and come to an
end on the date of the expiration of ten (10) days from the delivery
of such notice with the same force and effect as if such date was
the date herein fixed for the expiration of the term hereof, and the
Ground Rent shall be apportioned and paid to the date of such
termination. In such event Developer shall remove all debris and
level the land, and Developer shall have no obligation to repair or
rebuild or restore. The insurance proceeds its shall then be divided
as follows:
If five (5) years remain before the end of the Lease or any
extension thereof, Developer shall receive seventy-five percent
(75%) of the proceeds, and Landlord shall receive twenty-five
percent (25%); if four (4) years remain before the end of the Lease,
Developer shall receive fifty percent (50%) of the proceeds, and
Landlord shall receive fifty percent (50%); if three (3) years
remain before the end of the Lease, Developer shall receive twenty-
five percent (25%) of the proceeds, and Landlord shall receive
seventy-five percent (75%);
60
if two (2) years remain before the end of the Lease, Developer shall
receive ten percent (10%) of the proceeds, and Landlord shall
receive ninety percent if one (1) year remains before the end of the
Lease, Landlord shall receive the entire proceeds.
6.2.3 Miscellaneous. The insurance policies to be secured
-------------
by Developer pursuant to this subsection 6.2 shall be obtained from
insurers having a rating in Best's Insurance Guide of A-10, or
better (or a comparable rating in any similar Guide, if Best's Guide
is no longer published or if Best's rating system changes), and
shall require that the insurer give Landlord notice of any
modification, termination or cancellation of any policy of insurance
no less than thirty (30) days prior to the effective date of such
modification, termination or cancellation. In addition, Developer
shall notify Landlord of any modification, termination or
cancellation of any policy of insurance secured by Developer
pursuant to this subsection 6.2 as soon as Developer learns of any
such modification, termination or cancellation. The policy of public
liability and property damage insurance to be obtained under
subsection 6.2.1 above shall stipulate that said policy provides
primary coverage and is not subordinate to nor contributing with any
other insurance coverage held or maintained by Landlord. The
procuring of any such policy of insurance shall not be construed to
be a limitation upon Developer's liability or its full
61
performance on Developer's part of the indemnification and hold
harmless provisions of this Lease; and Developer understands and
agrees that notwithstanding any such policy of insurance,
Developer's obligation to protect, indemnify and hold harmless
Landlord under this Lease is for the full and total amount of any
damage, injuries, loss, expense, costs or liabilities caused by or
in any manner connected with or attributed to the acts or omission
of Developer, its officers, agents, employees, licensees, patrons or
visitors, or the operations conducted by Developer, or Developer's
use or misuse of the Premises, except to the extent resulting from
the negligent or willful acts of Landlord or any such indemnitee.
6.2.4 Blanket Policies. Nothing contained in this section
----------------
shall prevent Developer from requiring its subtenants, or any of
them, or any other third party, to provide the insurance required by
this Section 6, nor prevent Developer, or any of its subtenants, or
any its such third party from taking out insurance of the kind
provided for under this section under a blanket insurance policy or
policies which cover other personal and real property owned or
operated by Developer or any subtenant provided that the protection
afforded Landlord and Developer under any policy of blanket
insurance hereunder shall be no less than that which would have been
afforded under a separate policy or policies relating only to the
Premises.
62
6.2.5 Self-Insurance. If a subtenant is self-insured as a
--------------
matter of such subtenant's usual and customary business policy and
such self-insurance is accepted by institutional lenders, Developer
may request Landlord to waive the insurance requirement and to
consent and permit such subtenant to self-insure. Such request shall
be accompanied by information deemed necessary by Landlord to review
the request. Consent to self-insure shall not be unreasonably
withheld if the conditions specified in this section have been met.
6.2.6 Insurance Adjustments. The amounts of insurance
---------------------
specified in subsections 6.2.1 and 6.2.3 may be adjusted in the year
2000 and not more often then every third year thereafter for the
duration of the Lease to take into account circumstances at the time
of such adjustments.
6.3 Damage or Destruction.
---------------------
6.3.1 Restoration of Premises. If any building or improve-
-----------------------
ment on the Premises is totally or partially destroyed or damaged as
a result of any casualty, Developer shall promptly repair, replace
or rebuild such building or other improvement at least to the extent
of its value immediately prior to such occurrence, subject, however,
to delays resulting from force majeure, the cancellation of existing
leases due to such casualty, settling with insurers and/or
negotiating new financing if necessary. If less than twenty (20)
years remain of the term of this Lease or any
63
extension thereof, Developer may remove all damaged or destroyed
improvements and place the portions of the Premises from which
improvements are removed in a clean and level condition following
which all insurance proceeds attributable to such destruction or
damage shall be the property of Developer. After the commencement of
such repair, replacement or rebuilding Developer shall continue such
work with reasonable diligence until completion. Developer may cause
any such work to be performed by or under its subtenants. In no
event shall Landlord be liable to Developer for any damages
resulting to Developer from the happening of any such fire or other
casualty or from the repair or reconstruction of the Premises or
from the termination of this Lease as provided in subsection 6.3.2
below.
6.3.2 Right to Terminate. Notwithstanding the provisions of
------------------
subsection 6.3.1 above, if the buildings and improvements on the
Premises shall be damaged or destroyed as a result of a hazard
against which Developer is not required to carry insurance to an
extent in excess of fifty percent (50%), or more of their then
insurable value, or if such damage or destruction shall occur during
the last ten (10) years of the term of this Lease or during the last
ten (10) years of any extended term of this Lease, then Developer
shall have the right to elect not to repair, replace or rebuild such
casualty damage and to cancel this Lease by giving written notice
thereof to Landlord
64
within three hundred sixty-five (365) days after the date of any
such damage or destruction. Upon such termination, it will be the
obligation of Developer to remove all damaged or destroyed
improvements and to place the portions of the Premises from which
improvements are removed in a clean and level condition.
6.3.3. No Reduction in Rent. In case of destruction, there
--------------------
shall be no abatement or reduction of rent.
7. DEVELOPMENT OF THE PROJECT:
--------------------------
7.1 Scope of Development. The Project will be a business,
--------------------
office, research and development and industrial park. It is agreed by the
parties that the Project will be built to include one (1) or more buildings upon
the Premises, no one of which shall exceed the height limits established by
Federal Aviation Regulations (FAR). However, it is recognized that the scope of
development may be changed, enlarged or redistributed to meet a subtenant's or
user's needs or changed conditions. The facade treatment, landscaping and
character of the development will be substantially as proposed in the Long Beach
Airport Center submittal of December 7, 1983, as supplemented by a spiral bound
document entitled "Supplement to ▇▇▇▇▇▇ Industries, December 7, 1983, Proposal",
and included therein is a transmittal letter from ▇▇▇▇▇▇ Industries to the City
of Long Beach, dated January 12, 1984, ("Developer's Long Beach Airport Center
Submittal") on file in the offices of the Director of Community Development of
the City of Long Beach, or the equivalent of the
65
submitted proposal if approved by Landlord pursuant to subsection 7.3 hereof.
7.2 Developer's obligation to Develop Premises. Developer
------------------------------------------
agrees to commence the construction of improvements upon the Premises as an
orderly development in conjunction with the development of the adjoining
property leased from the City of Long Beach. Developer shall undertake as
expeditiously and fully as is reasonably possible in the exercise of sound
business judgment, the planning and construction of improvements upon Premises
and to further the interest thereof to the end that there will be ultimately
constructed on the Premises the development contemplated the Basic Concept
Documents or its alternative as approved by Landlord pursuant to subsection
7.3.7.
In the event Developer has not commenced construction on the Premises
by January 1, 1995, then the fair market rental value of the Premises shall be
adjusted in the manner set forth in subsection 3.2, as of January, 1995, upon
the assumption its that any building or buildings or other material improvements
planned for construction upon Premises had, in fact, been completed, unless the
provisions of section 3.1.3 shall apply.
7.2.1 Best Efforts to Sublease. Developer shall at all times
------------------------
use its best efforts to expedite to the fullest extent consistent
with the exercise of sound business the making and entering into of
sub-leases with subtenants upon terms and conditions satisfactory to
subtenants and not inconsistent with any of the requirements of this
Lease.
66
7.3 Architectural Approval.
----------------------
7.3.1 Restriction. No buildings or other improvements,
-----------
including without limitation, grading street, landscaping and parking
area improvements shall be constructed or maintained upon the Premises
unless the same conform to and are consistent with the zoning for the
site, building code requirements and other adopted construction
standards for public improvements of the City of Long Beach and the
scope of the Project, as defined in subsection 7.1 above, and are
approved by Landlord as provided in subsection 7.3.7 below.
7.3.2 Basic Concept Documents. Landlord and the City of Long
-----------------------
Beach have heretofore approved certain documents, including
preliminary Parcel Map No. 16960. Said documents, as the same may from
time to time be modified and/or supplemented with the approval of
Landlord pursuant to subsection 7.3.7 below are herein referred to as
the "Basic Concept Documents.
7.3.3 Landscaping. Prior to the construction of any
-----------
landscaping upon the Premises, Developer shall prepare and submit to
Landlord for Landlord's approval pursuant to subsection 7.3.7 below
preliminary landscape plans for such work. Following Landlord's
approval of Developer's preliminary landscape plans for such work and
prior to the commencement of such work, Developer shall prepare and
submit to Landlord for Landlord's approval pursuant to subsection
7.3.7 below final landscape plans for such work. Said landscape plans
need
67
not include landscaping between building walls and adjacent curbs
and/or parking areas, it being understood that preliminary and final
plans for such landscaping may be submitted separately by Developer to
Landlord for Landlord's approval under subsection 7.3.7 below when the
requirements of building occupants have been ascertained. Said
landscape plans shall be consistent with the Basic Concept Documents
and/or modifications or amendments thereto from time to time approved
by Landlord. In general, Developer shall be permitted freedom of
selection of landscaping plants, trees and other materials consistent
with the Basic Concept Documents.
7.3.4 Exterior Elevations. Prior to the construction of any
-------------------
building improvements upon the Premises, Developer shall prepare and
submit to Landlord for Landlord's approval pursuant to subsection
7.3.7 below exterior elevations for such building improvements. Such
exterior elevations need not include exterior building signs. The
exterior elevations utilized by Developer in the construction of
buildings upon the land leased by Developer under the existing City of
Long Beach Ground Lease have been approved in concept by Landlord for
purposes of this Lease and for no other purposes.
7.3.5 Security and Security Plans. Developer shall submit
---------------------------
to the Landlord for approval a site security plan, if required, both
for the construction period and for the Project as partially and fully
68
developed which shall comply with applicable Federal Aviation
Regulations and the requirements of the Airport Manager of the City of
Long Beach. Developer shall comply with FAR Part 107 regarding Airport
security and FAR Part 77 regarding height limitations. It is
particularly important that Developer notify the Airport Manager and
such other persons as he may direct twenty-four (24) hours in advance
of erecting cranes on the Premises for any purpose. Developer shall
pay any fine or penalty imposed on Landlord as a result of security
violations on the Premises. Developer shall have the right to contest
such fine or penalty.
7.3.6 Amendments. Developer may from time to time submit to
----------
Landlord for Landlord's approval pursuant to subsection 7.3.7 below
modifications and/or amendments to any of the items described in
subsections 7.3.3 through 7.3.5 above theretofore approved by
Landlord.
7.3.7 Landlord Approval. Developer shall submit all plans
-----------------
required by subsections 7.3 and 3.7 to Landlord, attention General
Manager, who shall coordinate the review and approval of such plans
with appropriate departments of the City of Long Beach. Landlord shall
either approve or disapprove of any item submitted for approval to
Landlord by Developer pursuant to subsections 7.3.3 through 7.3.6
above and subsection 3.7 within fifteen (15) days of Landlord's
receipt thereof by giving written notice of such approval or
69
disapproval to Developer. Any such disapproval shall state in writing
the reasons for disapproval. Failure by Landlord to expressly so
disapprove of any such item within such fifteen (15) day period shall
constitute Landlord's approval of such item.
The criteria to be used by Landlord in approving or
disapproving any such item shall be (i) compliance with the Basic
Concept Documents and PD-2 zoning, ii) exterior aesthetics, (iii)
consistency with prior improvement on the Premises or the adjacent
premises leased by Developer from the City of Long Beach, (iv)
relationship of improvements to adjacent land, including public
rights-of-way, (v) the general function of the spaces within the
Project between building areas and adjacent public rights-of-way,
consistent with overall project design. In general, Developer shall be
permitted freedom of design of all exteriors.
In the event Landlord disapproves of any such item, Developer
may cause such item to be appropriately revised and resubmit the same
to Landlord for approval pursuant to this subsection 7.3.7. Landlord
and Developer agree to cooperate reasonably each with the other in
resolving any objections of the other to such item and/or requested
modifications by the other party.
The provisions of this section with respect to notice, time
for and method of approval shall apply to any such revised item
resubmitted to Landlord for approval. Upon the approval of any such
item, Landlord
70
shall execute and return a copy of such item to Developer marked
approved by Landlord with the date of such approval.
Any item to be approved or disapproved by Landlord shall be
deemed to have been submitted to and received by Landlord on the date
such item is delivered to or received at the office of the Director of
Community Development of Landlord.
7.3.8 Communication and Consultation. Landlord and Developer
------------------------------
agree to communicate and consult informally as frequently as is
necessary to insure that the formal submittal of any item pursuant to
this section can receive prompt and speedy consideration. In addition,
during the period that Developer is preparing drawings and
specifications for buildings and other improvements to the Premises,
Landlord agrees, upon request of Developer, to schedule and hold
regular progress meetings in order to coordinate the compliance of
such drawings and specifications with the construction requirements of
this Lease.
7.3.9 Requirements of Institutional Lender or Major Occupant.
------------------------------------------------------
If any revisions or corrections of drawings and specifications,
landscape and grading plans and/or site plans consistent with the
items heretofore approved by Landlord or approved by Landlord pursuant
to this section are required by any institutional lender providing or
proposing to provide financing to Developer or major occupant or
proposed major occupant for a
71
building, Developer and Landlord shall cooperate with each other in
efforts to obtain the waiver of such requirements or to develop a
mutually acceptable alternative. A major occupant shall be deemed a
person or entity occupying or proposed to occupy all of a freestanding
building or in excess of 50,000 square feet of building floor area
upon initial occupancy. If no such waiver is obtained and no such
alternative is developed, Landlord shall amend the items so approved
by Landlord pursuant to this section as may reasonably be required for
consistency with such revisions or corrections. Any amendment of items
approved by the Landlord does not constitute a waiver of other legal,
governmental approvals.
7.3.10 Interior Improvements. During the term hereof,
---------------------
Developer shall have the right to make, at no expense to Landlord,
interior improvements to any building, and thereafter to make changes,
alterations, further improvements and additions in and to the interior
of any building as Developer may desire, subject to all applicable
codes, ordinances and statutes.
7.3.11 Modification of Plans. Developer may make changes and
---------------------
modifications to plans and specifications for buildings which are not
material or to resolve an inconsistency or ambiguity without obtaining
Landlord's prior approval. Landlord agrees that Developer may cause
the plans for any building to be modified to the extent required to
adapt the same to soil or other
72
conditions found on the Premises and to the extent modification
thereof is required by any governmental agencies or authorities having
jurisdiction to approve such plans, all without resubmitting the same
to Landlord for Landlord's reapproval.
7.4 Performance and Payment Bonds.
-----------------------------
7.4.1 Agreement to Provide. On or before the date of
--------------------
commencement of construction of any building, structure or other
improvements on the Premises having an estimated cost of One Million
and No/lOO Dollars ($1,000,000.00) or greater, Developer shall file or
cause to be filed with Landlord a performance bond and labor and
material payment bond executed by Developer or Developer's contractor
or subtenant, as principal, and by a surety authorized to do business
in the State of California, as surety, conditioned upon the
contractor's performance of its construction contract with Developer
and payment to all claimants for labor and materials used or
reasonably required for use in the performance of such contract, in a
form and with a surety reasonably acceptable to Landlord. Forms of
bond which generally are acceptable hereunder are attached hereto and
marked Exhibit "D". Said bond shall name or be endorsed to name
Landlord as a joint obligee with Developer and/or Developer and
Developer's lender. Landlord agrees to either approve or disapprove of
any such proposed bond submitted to Landlord for approval within ten
(10) days of Landlord's receipt
73
thereof. Any notice of disapproval shall specify the reasons for
disapproval and the modifications required to secure Landlord's
approval. Landlord's failure to expressly so disapprove of any such
bond within said ten (10) day period shall constitute Landlord's
approval of the form of such bond and of the surety issuing such bond.
7.4.2 Term of the Bond. The term of both bonds shall
----------------
commence on or before the date of filing with Landlord. The
Performance Bond shall remain in effect until the date of completion
of the work to the reasonable satisfaction of Landlord and the
obtaining of a final Certificate of Occupancy from the City of Long
Beach. The Payment Bond shall remain in effect until the expiration of
the period of filing a claim of lien as provided in Title 15 of Part 4
of the California Civil Code, and as hereafter amended, or if a claim
of lien is filed, the expiration of the period for filing an action to
foreclose such lien, or until the Premises are freed from the effect
of such claim of lien and any action brought to foreclose such lien
pursuant to the provisions of said Title 15 of Part 4 or the lien is
otherwise discharged.
7.4.3 Penal Sum. The Performance Bond shall be in the
---------
amount and provide a penalty of one hundred percent (100%) of the cost
of the improvements to be constructed as such cost shall be determined
by the Developer. The Payment Bond shall be in the amount and
74
provide a penalty of one hundred percent (100%) of the valuation of
the improvements to be constructed.
7.4.4 Alternative Performance. In lieu of the Performance
-----------------------
Bond and Payment Bond required by this subsection 7.4, Developer may
furnish cash, assignment of account, or a time certificate of deposit
or irrevocable letter of credit conditioned only on the terms of this
Lease or such other form of security as may be agreed upon by the
patties.
7.5 Construction.
------------
7.5.1 Costs of Construction. Except as provided in
---------------------
subsections 3.8, 3.9, and 7.5.10, the entire cost and expense of
constructing any and all improvements on the Premises, including
without limitation any and all on and off-site improvements required
by applicable governmental authorities under applicable zoning
ordinances or as a condition to parcel or final map approvals, shall
be borne and paid by Developer, or its subtenants, and Developer shall
hold and save Landlord and the Premises harmless from any liability
whatsoever on account thereof.
7.5.2 Right to Improve. Developer shall have the right to
----------------
construct buildings and other improvements upon the Premises and shall
have the right to change the grade of the Premises and to perform all
off-site work included within the scope and intent of the Basic
Concept Documents and/or to demolish and remove any and
75
all structures, foliage and trees situated upon the Premises as of the
date of this Lease as may reasonably be required for the purpose of
improving the same incidental to Developer's or a subtenant's use of
the Premises; provided, that such work shall be performed in
accordance with the applicable requirements of this Section 7, and
such laws of any governmental entity as may be applicable thereto and
that arrangements for access to adjacent leaseholds are completed
prior to commencement of work on those areas. Any and all
improvements, constructed by or for the Developer, except off-site
improvements, shall be owned by Developer and its successors or
assigns during the term of this Lease and, unless removed by Developer
upon the expiration of the term of this Lease as permitted by
subsection 17.10 below, shall become a part of the realty and the
absolute property of Landlord upon the expiration or earlier
termination of the term of this Lease.
7.5.3 Governmental Permits. Before commencement of
--------------------
construction or development of any buildings, structures, or other
work or improvements upon the Premises or within the Project area,
Developer shall, at its own expense with the cooperation of Landlord,
secure or cause to be secured any and all permits which may be
required by the City of Long Beach or any other governmental agency
having authority over such construction, development or work.
Developer shall provide a copy of each such permit to the Landlord
prior to com-
76
mencing the subject work or activity.
7.5.4 Rights of Access. For the purposes of assuring
----------------
compliance with this Lease, representatives of Landlord in addition to
those conducting inspections required by Landlord, shall have the
right of access to the Premises without charges or fees, at normal
construction hours, during the period of construction for the purposes
of this Lease, including but not limited to the inspection of the work
being performed in constructing the improvements required by this
Lease. Such representatives of Landlord shall be those who are so
identified in writing by the General Manager of Landlord except that
those employees of the City of Long Beach conducting inspections
required by law need not be so identified.
7.5.5 Local, State and Federal Laws. Developer shall carry
-----------------------------
out or cause to be carried out the construction of any buildings,
structures or other work or improvements upon the Premises in
conformity with all applicable laws. Any buildings, structures or
other improvements constructed or placed upon the Premises by or under
Developer, shall be constructed or placed in accordance with the laws
and regulations of the State of California and of the City of Long
Beach applicable to the Premises. Any applicable Federal Aviation
Regulation (FAR) shall also be complied with.
7.5.6 Antidiscrimination During Construction. Developer for
--------------------------------------
itself and its successors and assigns
77
agrees that in the construction of any improvements provided for in
this Lease, that Developer will not discriminate against any employee,
or applicant for employment because of age, sex, marital status, race,
handicaps, color, religion, creed, ancestry or national origin.
7.5.7 Responsibilities of Landlord.
----------------------------
7.5.7.1 Governmental Approvals. Landlord will assist
----------------------
and cooperate with Developer in connection with requests by Developer
for lot line adjustments, tentative or final, parcel, tract or
subdivision map approval, condominium plan approval, variances and any
other governmental approvals necessary for or which will facilitate
the development of the Premises, pursuant to this Lease including,
without limitation, the execution of documents required to dedicate or
offer for dedication or restrict or otherwise encumber or subdivide by
parcel or final maps or condominium plans portions of the Premises as
may be required by applicable governmental authorities.
7.5.7.2 Easements. Landlord agrees to join in granting
---------
or dedicating such public or private utility company easements as may
be required for the development of the Premises, for which no
consideration is given. With the exception of landscaping and
appurtenant structures as provided in subsection 7.5.9, Developer
shall have no re-
78
sponsibility for maintaining public rights-of-way, sewers, storm
drains and other facilities after dedication of same to the City of
Long Beach by Developer.
7.5.7.3 Off-Site Improvements. Subject to any
---------------------
limitation of law, Landlord shall take all such action as is necessary
and prudent in order to permit Developer to install and construct the
off-site improvements which are necessary to initially make the
Premises suitable for development according to Developer's Basic
Concept Documents. The costs of certain improvements shall be included
in Offsite Costs in the manner set out in subsections 3.6 through
3.10.
7.5.7.4 Bond Financing. Landlord further agrees to
--------------
assist with Developer's financing of the development of the Premises
by cooperating reasonably with Developer and using reasonable efforts
to sell or to cause any appropriate agency of the City of Long Beach
to sell industrial development bonds as a source for such financing,
if such action is legally permissible; by granting to or for the
benefit of the holders of any special assessment or district bonds
constituting a first lien on Developer's Leasehold Estate, or their
trustee, rights and remedies of a similar nature afforded Leasehold
Mortgagees under Section 4 hereof.
79
7.5.7.5 Hazardous Materials. Landlord shall, within a
-------------------
reasonable time and at its expense, remove any hazardous material on
Parcels A and B. Said removal shall be completed prior to commencement
of Initial Ground Rental.
7.5.8 Responsibilities of Developer. Developer, without
-----------------------------
expense to Landlord, shall perform all work specified of Developer in
this Lease. In addition, Developer shall furnish Landlord with semi-
annual progress reports demonstrating good faith compliance with the
construction requirements of this Lease on or before each semi-annual
period commencing with the sixth month anniversary of the date of this
Lease, through the occurrence of the completion date of such
construction.
7.5.9 Maintenance. In addition to the responsibilities
-----------
mentioned herein, Developer shall have sole and exclusive
responsibility for maintaining the Premises and all building
structures and improvements which may be constructed upon the Premises
in good condition and repair, at no cost or expense to Landlord,
reasonable wear and tear excepted. Developer shall also maintain all
landscaping and appurtenant structures installed in accordance with
plans approved pursuant to Section 7. Landlord will consider a request
to maintain landscaping in public rights-of-way.
7.5.10 Acceptance of Premises. Developer accepts the
----------------------
Premises in an "as-is condition, except
80
for subsurface toxic waste, hazardous materials and munitions, which
are the responsibility of Landlord to remove at Landlord's expense,
and also except for subsurface facilities of Landlord which are to
remain and which are to be maintained by Landlord. Developer
acknowledges that Developer has not received and Landlord has not
made any warranty, express or implied, as to the condition of the
Premises. Developer agrees to bear all expenses incurred in the
development, operation and maintenance of the Premises, except for
improvements and facilities dedicated for public use to the City of
Long Beach or to other governmental authority, and except for removal
and disposition of subsurface hazardous materials and munitions and
subsurface facilities of Landlord which are to be retained by
Landlord.
7.6 Subdivided Leases. For the purpose of facilitating the
-----------------
development of the Project and obtaining financing and refinancing of
improvements to be constructed thereon, at any time and from time to time during
the term, within thirty (30) days after notice of demand from Developer,
Landlord shall enter into separate new leases ("Subdivided Lease") so that there
shall be one lease for each developable parcel in the Premises. The Subdivided
Leases described herein shall be for the sole purpose of lease, sale or
financing of the development. In all matters affecting the relationship, rights
or obligations of the parties hereto, or in the case of any inconsistency
between
81
the language of the documents, this Lease as undivided and unmodified shall
govern except that as to the individual subdivided lease parcels, rents,
security deposits, legal descriptions and requirements governing amount and
level of construction may be varied to conform to the specifics of such parcel,
as long as the totals in all such categories for all subdivided leases added
together correspond to the totals expressed in this document. Developer shall
pay to Landlord as a separate charge apart from rents a one time charge, payable
in advance to reimburse Landlord's costs and expenses in separating the leases
and reviewing and administering all the leases as separated in the sum of Five
Thousand Dollars ($5,000.00). Each Subdivided Lease shall:
7.6.1 Same Parties. Have the same parties as the parties to
------------
this Lease.
7.6.2 Obligations of Subdivided Leases. Be released from
--------------------------------
the overall obligations expressed in this Lease to pay rent and to
carry out specific levels of construction within specific periods,
provided, however that each such parcel shall be subject to an
appropriate proportionate share of such obligations such that the
total of such obligations divided among separated leases is not less
than the total of such obligations expressed in this Lease. All other
obligations imposed by this Lease shall apply to each such separate
parcel as an undivided shared obligation. As to any conflict between
the Subdivided Leases or all of them and this Lease, the terms of
this Lease shall govern.
7.6.3 Terms, Covenants. Contain the same
----------------
82
terms, covenants, provisions, conditions and agreements as those
contained in this Lease except that:
7.6.3.1 Ground Rent. The Ground Rent and other periodic
-----------
payments to be made by Developer as part of Developer's obligation
under this Lease and the security deposit under subsection 16.1
shall, under the Subdivided Lease, bear substantially the same
proportion to amounts provided in this Lease as the area of the
Premises in the Subdivided Lease bears to the area of the Premises in
this Lease. Provided, however, that if the fair market value of any
land included in a Subdivided Lease is substantially greater or less
than the balance of the land included in this Lease, then the Ground
Rent may be appropriately varied between the Subdivided Lease and
this Lease in order to take into account such variance in the fair
market land value.
7.6.3.2 Improvements. Any improvements constructed upon the
------------
Premises demised by a Subdivided Lease shall satisfy Developer's
obligations imposed by this Lease. The right of Developer to make
improvements shall be apportioned around the Subdivided Leases
substantially as is provided in subsection 7.6.3.1.
7.6.3.3 Easements and CC & R's. Each Subdivided Lease shall
----------------------
contain all cross-easements, covenants, conditions, restrictions and
agreements requested by Developer, and approved by Landlord,
83
provided they reasonably facilitate separating this Lease into
individual Subdivided Leases within the overall intent of this Lease.
7.6.3.4 Description of Property. Each Subdivided Lease
-----------------------
shall cover only that portion of the Premises specified by Developer
in Developer's notice of demand, provided that Developer shall
accompany each notice of demand with an accurate survey and metes and
bounds description of the portion of the Premises to be covered by
the Subdivided Lease; or if the Premises have been divided into
separate parcels, with the appropriate parcel map description of such
Premises.
7.6.3.5 Excluded Matters. Obligations under this Lease which
----------------
have been satisfied or which are not applicable shall be excluded
from a Subdivided Lease.
7.7 Combining Leases. At any time and from time to time after
----------------
the execution of any such Subdivided Lease, within thirty (30) days after notice
of demand from Developer, Landlord shall enter into a single lease ("Single
Lease") combining any two or more of the Subdivided Leases, covering all the
portions of the Premises covered by the component Subdivided Leases, and
containing the same terms, covenants, provisions, conditions and agreements as
those contained in the component Subdivided Leases, except that:
84
7.7.1 Ground Rent. The Ground Rent and other periodic
-----------
payments to be made by Developer as part of Developer's obligation
under the Single Lease shall be the sum of the Ground Rent and other
periodic payments payable under the component Subdivided Leases;
7.7.2 Easements and CC & R's. The Single Lease shall
----------------------
contain all cross easements, covenants, conditions, restrictions and
agreements requested by Developer and approved by Landlord provided
they reasonably facilitate combining the component Subdivided Leases
and integrating the operation of the Single Lease with that of any
Subdivided Leases still outstanding within the overall intent of this
Lease.
8. USE:
---
8.1 Permitted Development. The Project shall be a business,
---------------------
office, research and development and industrial park, with offices and
facilities and space for sublease to subtenants. Developer may, on an interim
basis, continue all businesses and uses now being conducted on the Premises.
This shall have no effect on the rent required to be paid under this Lease.
8.2 Vehicle Parking. No vehicle not related to or used in the
---------------
business of Developer or its subtenants or their respective employees, agents,
guests or invitees shall be parked on the Premises for any period greater than
twenty-four (24) hours.
85
8.3 Federal Aviation Administration. Use of the Premises shall
-------------------------------
conform to and be limited by applicable zoning regulations, any conditions
lawfully imposed by duly empowered governmental authority having jurisdiction
over the Premises, the terms, covenants, conditions and restrictions imposed by
this Lease and such lawful rules and regulations of the Federal Aviation
Administration ("FAA") as may be applicable from time to time to the Premises.
Landlord shall cooperate fully with Developer in obtaining all required FAA
approvals.
8.4 Inspection. At all times during the term of this Lease, Landlord
----------
shall retain the right of access to and ingress and egress over the Premises to
inspect aviation related operations and to enforce codes or ordinances and
provisions of this Lease, subject to governmental and reasonable subtenant
security requirements.
9. LIENS:
-----
9.1 Developer's Responsibility. Developer shall not permit any
--------------------------
liens to be enforced against Landlord's interests in and to the land comprising
the Premises, nor against Developer's leasehold interest therein by reason of
work, labor, services or materials supplied or claimed to have been supplied to
Developer or anyone holding the Premises, or any part thereof, through or under
Developer, and Developer agrees to indemnify Landlord against such liens.
9.2 Notice of Work. Before any buildings, structures or other
--------------
improvements or additions thereto, having a cost in excess of One Hundred Fifty
Thousand and No/l00 Dollars
86
($l50,000.00) are constructed or reconstructed upon the Premises, Developer
shall serve written notice upon the Landlord in the manner specified in this
Lease of Developer's intention to perform such work for the purpose of enabling
Landlord to post notices on non-responsibility under the provisions of Section
3094 of the Civil Code of the State of California, or any other similar notices
which may be required by law.
9.3 Discharge of Liens. If any mechanics liens or other liens shall
------------------
be filed by reason of work, labor, services or materials supplied or claimed to
have been supplied to Developer or anyone holding the Premises, or any part
thereof, through or under Developer, Developer shall cause the same to be
discharged of record within sixty (60) days after notice to Developer of the
filing thereof, or otherwise free the Premises from the effect of such claim of
lien and any action brought to foreclose such lien within such sixty (60) day
period, or Developer, within such sixty (60) day period, shall promptly furnish
to Landlord a bond in an amount and issued by a surety company satisfactory to
Landlord securing Developer against payment of such lien and against any and all
loss or damage whatsoever in any way arising from the failure of Developer to
discharge such lien.
9.4 Landlord's Right to Pay. In the event Developer fails to perform
-----------------------
its obligations under subsection 9.3 above with respect to any lien within the
sixty (60) day period specified in subsection 9.3 above, Landlord may, but shall
not be obligated to pay the amount thereof, inclusive of any interest thereon,
and any costs assessed against Developer in said litigation, or may discharge
such lien by contesting its validity or
87
by any other lawful means.
9.5 Reimbursement of Landlord. Any amount paid by Landlord for any
-------------------------
of the expenses described in subsection 9.4 above, and all reasonable legal and
other expense of Landlord, including reasonable counsel fees, and costs of suit,
in defending any such action or in connection with procuring the discharge of
such lien, with all necessary disbursements in connection therewith, together
with interest thereon at the rate provided by law from the date of payment shall
be repaid by Developer to Landlord on demand.
10. CONDEMNATION:
------------
10.1 Definition of Terms. The following definitions shall govern
-------------------
interpretation of this subsection.
10.1.1 Total Taking. The term "total taking" as used in
------------
this Section 10 means the taking of the entire Premises under the
power of eminent domain or the taking of so much thereof as the
parties mutually agree will prevent or substantially impair the use
of the Premises of the uses and purposes than being made or proposed
to be made by Developer of the Premises. If the parties do not agree
as to whether prevention or substantial impairment has occurred, that
issue may be arbitrated as provided in the rules for arbitration
published by the American Arbitration Association. Each party shall
pay half of the cost of such arbitration.
88
10.1.2 Partial Taking. The term "partial taking" means the
--------------
taking of a portion only of the Premises which does not constitute a
total taking as defined above.
10.1.3 Voluntary Conveyance. Neither party to this Lease
--------------------
will voluntary convey any interest related to this Lease to any
agency, authority or public utility under threat of a taking under
the power of eminent domain in lieu of formal proceedings without
first providing written notice to the other of any request or
intention to do so.
10.1.4 Date of Taking. The term "date of taking" shall be
--------------
the date title to the Premises or portion thereof passes and vests in
the condemnor or the date of entry of an order for immediate
possession with any judicial proceeding in eminent domain or the date
physical possession of the Premises is taken or interfered with,
whichever first occurs.
10.1.5 Leased Land. The term "leased land" means the real
-----------
property demised hereby, but exclusive of any and all improvements
situated upon the Premises at the commencement of the Lease term and
also exclusive of all improvements constructed or placed thereon by
or under Developer and exclusive of any grading and other site work
performed by or under Developer.
10.2 Effect of Taking. If during the term hereof there shall be a
----------------
total or partial taking under the power of eminent domain, then the Leasehold
Estate of Developer in and to
89
the Premises, in the event of a total taking, or the portion thereof taken, in
the event of a partial taking, shall cease and terminate, as of the date of
taking thereof. If this Lease is so terminated in whole or in part, all Ground
Rent and other charges payable by Developer to Landlord hereunder attributable
to the Premises, or portion thereof taken, shall be paid by Developer up to and
prorated through the date of taking by the condemnor. Any portion of the
security deposit provided for in subsection 16.1.1 fairly attributable to the
terminated portion of the Lease-hold Estate shall be repaid to Developer and the
parties shall thereupon be released from all further liability in relation
thereto.
10.3 Allocation of Award. All compensation and damages awarded
-------------------
in connection with any taking, total or partial, of the Premises including any
improvements thereon shall be allocated so that Developer shall receive that
portion of the award attributable to the value determined for improvements then
existing on the Premises, the value of Developer's leasehold interest in the
Premises and severance or other damages to buildings or the Leasehold Estate.
The remainder of the award, including all portions of the award attributable to
the value of the land as affected by the leasehold, and any severance or other
damages to the land, shall be payable to Landlord.
10.4 Reduction of Ground Rent on Partial Taking. In the event of a
------------------------------------------
partial taking, the Ground Rent payable by Developer shall be adjusted from the
date of taking to the next adjustment date (see subsection 3.2.1). Such Ground
Rent adjustment caused by the partial taking shall be made by reducing the
90
Ground Rent payable by Developer based on the ratio between the fair market
value of the leased land at the date of taking and the fair market value of the
leased land remaining immediately thereafter, valued for the use being made of
the leased land by Developer prior to such taking.
10.5 Temporary Taking. If all or any portion of the Premises shall
----------------
be taken by any competent authority for temporary use or occupancy, this Lease,
at the option of Developer, shall continue in full force and effect without
reduction or abatement of rent, notwithstanding any other provision of this
Lease, statute or rule of law to the contrary, and Developer shall, in such
event, be entitled to the entire award for such taking to the extent that the
same shall be applicable to6 the period of such temporary use or occupancy
included in the term of this Lease and Landlord shall be entitled to the
remainder thereof.
11. ALTERATIONS BY DEVELOPER:
------------------------
Developer shall have the right at any time and from time to time
during the Lease term to make, at its sole cost and expense, such changes and
alterations, structural or otherwise, in or to the improvements, other than
dedicated public improvements, constructed upon the Premises as Developer shall
deem necessary or desirable, including without limitation, the right to remove
and/or demolish buildings and other improvements provided that other buildings
or improvements are constructed in their place if such demolition occurs when
twenty (20) or more years are remaining in the term of this Lease, including any
91
extensions hereof. The rights granted by this section shall be limited to and
their exercise shall comply with the terms of Section 7 and subsection 3.3
hereof.
12. TAXES AND ASSESSMENTS:
---------------------
12.1 Payment by Developer. Developer recognizes and understands
--------------------
that this Lease may create a possessory interest subject to property taxation
and that Landlord may be subject to the payment of property taxes on such
interest. Developer shall pay prior to delinquency all real estate taxes and
assessments on the Premises and/or Developer's possessory interests therein
levied during the term of this Lease. Developer shall not place or allow to be
placed on the Premises, or any part thereof, any mortgage, trust deed,
encumbrance or lien unauthorized by this Lease. Developer shall remove or have
removed any levy or attachment made on any of the Premises, or any part thereof,
or assure the satisfaction thereof within a reasonable time, but in any event
prior to a sale thereof. Nothing herein contained shall be deemed to prohibit
Developer from contesting the validity or amounts of any tax, assessment,
encumbrance or lien, nor to limit the remedies available to Developer in respect
thereto.
12.2 Installment Payments. If any real estate, special tax or
--------------------
assessments are at any time during the term of this Lease, levied or assessed
against the Premises or Developer's Leasehold Estate hereunder, which, upon
exercise of any option permitted by the assessing authority, may be paid in
installments or converted to an installment payment basis (irrespective of
whether interest shall accrue on unpaid installments), Developer
92
may elect to pay such taxes or assessments in installments with accrued interest
thereon. In the event of such election, Developer shall be liable only for
those installments of such taxes or assessments which become payable during the
term of this Lease, and Developer shall not be required to pay any such
installment which becomes due and payable after the expiration of the term of
this Lease. Landlord shall execute whatever documents may be necessary to
convert any such taxes or assessments to such an installment payment basis if
requested so to do by Developer and if such action is authorized by law then in
effect.
12.3 Proration. Any real estate taxes and assessments which are
---------
payable by Developer hereunder shall be prorated between Landlord and Developer
at the commencement and expiration or earlier termination of the term of this
Lease if such real estate taxes and assessments relate to a fiscal period of the
levying authority which arose before the term commenced or extends beyond the
expiration or earlier termination of the term hereof.
12.4 Right to Contest. Developer and any subtenant, with
----------------
Developer's consent, shall have the right to contest the amount or validity of
any real estate taxes and assessments, in whole or in part, by appropriate
administrative and legal proceedings, without any cost or expense to Landlord,
and Developer may postpone payment of any such contested real estate taxes and
assessments pending the prosecution of such proceedings and any appeals so long
as such proceedings shall operate to prevent the collection of such real estate
taxes and the sale of the Premises to satisfy any lien arising out of the
nonpayment of the
93
same, provided, however that if at any time payment of the whole or any part
thereof shall become necessary in order to prevent the termination of the right
of redemption of any property affected thereby, or if there is to be an eviction
of Developer because of nonpayment thereof, Developer shall pay the same in
order to prevent such termination of the right of redemption or such eviction.
Landlord shall execute and deliver to Developer whatever documents may be within
Landlord's legal authority necessary or proper to permit Developer or any
subtenants, with Developer's consent, to so contest any real estate taxes or
which may be necessary to obtain payment of any refund which may result from any
such proceedings. Any such contest shall be at no cost or expense to Landlord.
Each refund of any tax or assessment so contested shall be paid to Developer.
13. CERTIFICATES BY DEVELOPER AND LANDLORD:
--------------------------------------
13.1 Developer to Provide. Developer agrees upon not less than
--------------------
twenty (20) days' notice by Landlord to execute, acknowledge and deliver to
Landlord a statement in writing certifying (i) that this Lease is unmodified and
in full force and effect (or if there have been modifications that the same is
in full force and effect as modified and stating the modifications);(ii) whether
or not to the best knowledge of Developer there are then existing any offsets or
defenses against the enforcement of any of the terms, covenants or conditions
hereof upon the part of Developer to be performed and, if so, specifying the
same; and (iii) the dates to which the Ground Rent and other charges have been
paid, it being intended that any such statement delivered
94
pursuant to this subsection may be relied upon by any prospective purchaser of
the fee of the real property comprising the Premises.
13.2 Landlord to Provide. Landlord agrees upon not less than twenty
-------------------
(20) days' prior notice by Developer, to execute, acknowledge and deliver to
Developer a statement in writing certifying (i) that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as modified and stating the modifications); (ii) the
dates to which the Ground Rent and other charges have been paid; (iii) stating
whether or not to the best knowledge of Landlord, Developer is in default in
performance of any covenant, agreement or condition contained in this Lease and,
if so, specifying each such default of which Landlord may have knowledge; and
(iv) whether or not there are to Landlord's best knowledge any offsets or
defenses claimed by and/or available to Developer to the payment or rental, it
being intended that any such statement delivered pursuant to this subsection may
be relied upon by any prospective assignee or subtenant of the whole or any
portion of the Premises, or by any lender extending credit on the security of
Developer's Leasehold Estate.
14. QUIET ENJOYMENT:
---------------
Landlord covenants that Developer, upon the performance of the
covenants and agreements herein contained on Developer's part to be performed,
shall and may at all times, for itself and its subtenants, peaceably and quietly
have, hold and enjoy the Premises during the term of this Lease.
95
15. TERMINATION AND FURTHER LEASING:
-------------------------------
15.1 Termination. Subject to the provisions of Section 4, this
-----------
Lease may be terminated at any time by mutual agreement of the parties.
15.2 Termination by Developer. Developer may terminate this Lease
------------------------
in the event: (A) Developer is unable to secure an extended coverage leasehold
policy of title insurance, within ninety (90) days following execution of this
Lease containing only those exceptions approved by Developer; (B) during the
first twelve (12) months that this Lease is in effect if costs and expenses
associated with development of the Premises shall increase in an amount which,
in the Developer's good faith judgment, renders such development uneconomic; or
(C) during the first seven (7) years that this Lease is in effect if Developer
is not able to obtain a Lease of Parcel 7 of Parcel Map 16960, pursuant to the
Option to Lease between the City of Long Beach and Developer, dated December 20,
1985. As a condition precedent to termination, Developer shall have first given
Landlord sixty (60) days notice of its intention to terminate during which time
Landlord shall have an opportunity to cure the deficiency, if possible, within
Landlord's exclusive discretion
15.3 Termination by Landlord. Subject to the provision of Section 4
-----------------------
of this Lease, Landlord may terminate this Lease under the following
circumstances:
15.3.1 Developer fails to pay rent or any other charge
required by this Lease.
15.3.2 Developer assigns this Lease in violation of
subsection 5.1.
96
15.3.3 Failure of Developer to submit drawings or related
documents required by this Lease.
15.3.4 Failure of Developer to provide the good faith
deposit required by this Lease.
15.3.5 Bankruptcy of Developer. Final adjudication or
filing of a voluntary petition for bankruptcy by Developer.
Provided, however, that in all cases, Landlord shall give Developer
sixty (60) days prior written notice of its intention to terminate, during which
time Developer shall have an opportunity to cure the default. However, if the
default is of a nature such that it cannot be cured within sixty (60) days,
Developer shall not be in default if Developer shall commence such use and
diligently prosecute it to completion.
16. SECURITY DEPOSIT:
----------------
16.1 Good Faith Deposit.
------------------
16.1.1 Receipt by Landlord. Developer has, concurrently
-------------------
with the execution and delivery of this Lease, delivered to Landlord
a good faith deposit in the amount of One Hundred Thousand and No/100
Dollars ($100,000.00) as security for the performance of the
obligations of Developer to be performed in accordance with the
provisions of this Lease. The receipt of the deposit is hereby
acknowledged by Landlord.
16.1.2 Form of Deposit. The good faith deposit, at the
---------------
option of Developer, may be in the form of (i) cash; or (ii)
cashier's or certified check; or
97
(iii) negotiable certificate or certificates of deposit issued by a
federal or state bank or savings and loan association; or (iv) an
irrevocable letter of credit in favor of Landlord issued by an
established bank or other institution satisfactory to Landlord; or
(v) a bond in a form and with a surety reasonably satisfactory to
Landlord providing for payment to Landlord of amounts that may become
payable to Landlord under this Lease from time to time; or (vi) such
other form of security or deposit as may be mutually acceptable.
Developer may change the form of the deposit from time to time, at
its option, to any other of the permitted forms of deposit. The
deposit, if in cash or certified or cashier's check shall be
deposited in an interest bearing account of Landlord in a bank,
savings and loan association or trust company selected by Developer
and approved by Landlord, which approval shall not unreasonably be
withheld. Developer shall have the right to specify the type of
account in which such funds are, from time to time, to be deposited.
Provided that no default has occurred during the term of the Lease
which has resulted in a forfeiture by Developer of all or a part of
the good faith or security deposit, such deposit, or any portion
thereof which has not been forfeited, shall be returned to Developer
upon expiration of this Lease.
16.1.3 Interest. Landlord shall be under no obligation to pay
--------
or earn interest on the deposit, but
98
if interest shall accrue or be payable thereon such interest, when
received by Landlord, shall be promptly paid to Developer. Landlord
agrees, but not more often than quarterly, upon receipt of a request
from Developer, to cause any such interest so accrued on such deposit
to be paid to Developer by the bank, savings and loan association or
trust company with which said sums have been deposited.
16.1.4 If Bond is Posted. If a bond is posted to satisfy
-----------------
the requirements of this Lease with a fixed term and if such bond
expires prior to the date Developer is entitled to have the security
deposit returned, Developer shall provide Landlord with either (i)
evidence of the renewal of such bond for an additional period, or
(ii) a new security deposit satisfying the requirements of subsection
16.1 in one of the forms authorized by such subsection, including,
without limitation, a new bond, not less than twenty (20) days prior
to the expiration of the bond posted to satisfy the requirements in
subsection 16.1 above.
17. GENERAL PROVISIONS:
------------------
17.1 Notices, Demands and Communications between the Parties.
-------------------------------------------------------
Written notices, demands, and communications between Landlord and Developer
shall be in writing and shall be sufficiently given if personally served or if
mailed by registered or certified mail, postage prepaid, return receipt
requested, to the principal offices of Landlord or Developer, set forth in
99
subsection 1.5 of this Lease. Any such notice, demand or communication so given
by mailing to Landlord shall be mailed to the attention of the General Manager
of Landlord. Copies of any such notice, demand or communication to be given to
Developer pursuant to this Lease shall be given to ▇▇▇▇▇▇ Long Beach Associates,
Attention, President, such other entity, person or persons as he may designate,
by personal service or by mailing the same, as required by this subsection, to
such party, at the address set forth in subsection 1.5 above or such other
address as may be designated. Either Landlord or Developer may from time to
time by written notice to the other designate a different address or addresses
or party or parties to whom copies of notices, demands and communications are to
be delivered or to whose attention notices, demands and communications are to be
addressed which shall be substituted for the addresses and/or names above
specified. Notices shall be deemed served effective immediately if personally
served and effective as of the date received and set forth on the return receipt
if served by registered or certified mail.
17.2 Conflict of Interest. No member, official or employee of
--------------------
Landlord shall have any personal interest, direct or indirect, in this Lease,
nor shall any such member, official or employee participate in any decision
relating to this Lease which affects his personal interest or the interest of
any corporation, partnership or association in which he is, directly or
indirectly, interested. No member, official or employee of Landlord shall be
personally liable to Developer, or any successor in interest, in the event of
any default or breach by Landlord
100
or for any amount which may become due to Developer or successor or on any
obligations under the terms of this Lease.
17.3 Enforced Delay: Extension of Time of Performance. In addition
-------------- --------------------------------
to other provisions of this Lease, performance by either party hereunder, shall
not be deemed to be in default where delays or defaults are unavoidable or
performance is rendered impracticable, due to war; enemy action; insurrection;
civil disturbance; strikes; lock-outs; riots; floods; earthquakes; fires;
casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental
restrictions or moratoria; failure or inability to secure materials or labor by
reason of regulations or order of any governmental entity; litigation including
eminent domain proceedings or related legal proceedings; acts or failure to act
of the other party; acts or failure to act of any public or governmental agency
or entity; and the time for such performance shall be extended for a period
equal in length to such delay(s).
17.4 Inspection of Books and Records. Landlord has the right at all
-------------------------------
reasonable times during regular business hours to inspect the books and records
of the Developer pertaining to the Premises as pertinent to the purposes of this
Lease. Developer also has the right at all reasonable times during regular
business hours to inspect the books and records of the Landlord pertaining to
the Premises as pertinent to the purpose of this Lease.
101
17.5 Defaults and Remedies.
---------------------
17.5.1 Defaults - General. Subject to the extensions of
------------------
time set forth in subsection 17.3 above, failure by either party to
perform any term or provision of this Lease constitutes a default
under this Lease, if not cured within thirty (30) days from the date
of receipt of a written notice from the other party specifying the
claimed default provided that if such default cannot reasonably be
cured within such thirty (30) day period, the party receiving such
notice of default shall not be in default under this Lease if such
party commences the cure of such default within such thirty (30) day
period and thereafter diligently prosecutes the steps to cure such
default to completion.
17.5.2 Institution of Legal Actions. In addition to any
----------------------------
other rights or remedies, either party may institute legal action to
cure, correct, or remedy any default, to recover damages for any
default, or to obtain any other remedy consistent with the purpose of
this Lease. Such legal actions must be instituted in the South Branch
of the Superior Court of the County of Los Angeles, State of
California, in an appropriate municipal court in that county, or in
the Federal District Court in the Central District of California. The
prevailing party in any action commenced pursuant to this Lease shall
be entitled to recover reasonable costs, expenses and attorneys'
fees.
102
17.5.3 Applicable Law. The laws of the State of California
--------------
shall govern the interpretation and enforcement of this Lease.
17.5.4 Service of Process. In the event any legal action is
------------------
commenced by Developer against Landlord, service of process on
Landlord shall be made by personal service upon the General Manager
of the Landlord, or in such other manner as may be provided by law.
In the event that any legal action is commenced by Landlord
against Developer, service of process on Developer shall be made as
provided by law and shall be valid whether made within or without the
State of California, or in such manner as may be provided by law.
17.5.5 Rights and Remedies Are Cumulative. Except as otherwise
----------------------------------
expressly stated in this Lease, the rights and remedies of the
parties are cumulative, and the exercise by either party of one or
more of such rights or remedies shall not preclude the exercise by
it, at the same or different times, of any other rights or remedies
for the same default or any other default by the other party.
17.5.6 Inaction Not a Waiver of Default. Any failures or
--------------------------------
delays by either party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any
such rights or remedies or deprive either such party of its
103
right to institute and maintain any actions or proceedings which it
may deem necessary to protect, assert or enforce any such rights or
remedies.
17.5.7 Remedies. In the event of a default by Developer, which
--------
is not cured by Developer within the times specified in this Lease,
Landlord, without further notice to Developer, may declare this Lease
and/or Developer's right of possession at an end and may reenter the
Premises by process of law, in which event, Landlord shall have the
right to recover from Developer:
17.5.7.1 The worth at the time of award of the unpaid Ground
Rent which has been earned at the time of termination, plus interest;
17.5.7.2 The worth at the time of award of the amount by
which the unpaid Ground Rent which would have been earned after
termination until the time of award exceeds the amount of such rental
loss that Developer proves could have been reasonably avoided, plus
interest;
17.5.7.3 The worth at the time of award of the amount by
which the unpaid Ground Rent for the balance of the term after the
time of award exceeds the amount of such rental loss for the same
period that Developer proves could be reasonably avoided, plus
interest thereon; and
104
17.5.7.4 The remedies of Landlord as hereinabove provided
are subject to the other provisions of this Lease, including
Section 4 hereof.
17.5.8 Developer's Rights. Developer shall have the right to
------------------
challenge the correctness of any determination of default made by
Landlord, and Landlord shall carefully review and consider
Developer's challenge.
17.5.9 Lease Termination. Should governmental action or
-----------------
failure to act preventing construction in accordance with this Lease
or rendering it impossible, occur prior to the time that Developer
has constructed any building upon the Premises, then Developer shall
have the right, at its option, with the prior written approval of any
lender which has a security interest in the Leasehold Estate, to
cancel and terminate this Lease by giving written notice of such
termination to Landlord, at any time prior to the construction of a
building upon the Premises. Upon any such termination of this Lease,
Developer and Landlord shall execute and record a quitclaim deed
sufficient to remove the cloud of this Lease and the short form of
this Lease from record title to the Premises and the deposits
described in subsections 16.1 and 16.2, plus any interest accrued on
such deposits, shall be paid to Developer by Landlord.
17.5.10 Landlord's Exercise of Remedies. In the event of an
-------------------------------
uncured default by Developer in the performance of any of its
obligations to commence and
105
complete the construction of the initial building within the times
required by Section 7 of this Lease and in the further event that
Landlord elects to exercise its remedy to terminate this Lease by
reason of such default by Developer, Developer may, for a period of
thirty (30) days following its receipt of written notice from
Landlord of Landlord's election to terminate this Lease by reason of
such default, elect to prevent such termination from becoming
effective by releasing and paying to Landlord a portion of the good
faith deposit held by Landlord under subsection 16.1, which portion
shall be equal to the lesser of (i) the amount of such deposit so
held by Landlord; or (ii) an amount equal to the product of One and
One-half Dollar ($1.50) per square foot times the number of square
feet of building area the failure to commence or complete the
construction of which has caused the subject default or the adjusted
rent per square foot if this provision becomes operative after any
rental adjustment.
17.5.11 Payment to Developer. In the event that this Lease is
--------------------
terminated as a result of an uncured default by Landlord and in the
further event that Developer has constructed streets, utilities
and/or other off-site improvements or grading improvements upon or in
relation to the Project prior to such termination of this Lease,
Landlord shall, pursuant to its responsibilities under State law, use
its best efforts to resell or relet the Premises, or any portion
thereof,
106
as soon and in such manner as Landlord shall find feasible and
consistent with the objectives of such law to a qualified and
responsible party or parties (as reasonably determined by Landlord)
who will assume the obligation of making or completing the
improvements required of Developer under this Lease, or such other
improvements in their stead as shall be satisfactory to Landlord and
in accordance with the uses specified for the Premises in this Lease.
Upon such resale or reletting of the Premises, or any portion
thereof, the proceeds thereof shall be applied:
17.5.11.1 Reimbursement to Landlord. First, to reimburse
-------------------------
Landlord for all costs and expenses incurred, including, but not
limited to, salaries to personnel in connection with the recapture,
management, and resale or reletting of the Premises, or part thereof
(but less any income derived by Landlord from the Premises, or part
thereof, in connection with such management); all taxes, assessments
and water and sewer charges paid with respect to the Premises, or
part thereof; any payments made or which are necessary to be made to
discharge any encumbrances or liens existing on the Premises, or part
thereof, at the time or revesting of title thereto in Landlord or to
discharge or prevent from attaching any subsequent encumbrances or
liens due to obligations, defaults or acts of Developer, its
successors or transferees;
107
any expenditures made or obligations incurred with respect to the
making or completion of the improvements or any part thereof on the
Premises, or part thereof; and any amounts otherwise owing Landlord
by Developer and its successor or transferee;
17.5.11.2 Reimbursement to Developer. Second, to reimburse
--------------------------
Developer, its successors or transferees, a sum up to the amount
equal to the sum of (i) the costs incurred for the development of the
Project, prorated to the Premises, if the Premises are less than all
of the Project, on a square foot basis, and for the improvements
existing on the Premises at the time of the re-entry and repossession
by Developer, less (ii) any gains or income withdrawn or made by
Developer from the Premises or the improvements thereon; provided
however, that no payment shall be made to Developer if this Lease is
terminated as a result of an uncured default by Developer.
17.5.11.3 Ground Rent. Third, in the case of a reletting,
-----------
to pay to Landlord an amount equal to the Ground Rent and other
payments payable to Landlord hereunder that Landlord would have
received if this Lease had not been terminated;
17.5.11.4 Remaining Balance. Any balance remaining after such
-----------------
reimbursement shall be retained by Landlord as its property. In the
event that such street, utility and/or other off-site improve-
108
ments have been constructed by or the costs of such construction were
paid or reimbursed by an improvement or special assessments district,
the provisions of this subsection shall be applicable to the costs
for such improvements if payment of the bonds issued by such district
have been guaranteed by Developer or are secured by security, in
addition to the Leasehold Estate created hereby, or paid by
Developer, but only to the extent of such payment by Developer or of
payment from the proceeds of such guarantee or security.
17.5.12 Delivery of Plans. In the event that this Lease is
-----------------
terminated, for any reason whatsoever, Developer shall deliver to
Landlord one set of all plans and data in its possession concerning
the Premises.
17.6 Right to Contest Laws. Developer shall have the right,
---------------------
after notice to Landlord to contest or to permit its subtenants to contest by
appropriate legal proceedings, without costs or expense to Landlord, the
validity of any law, ordinance, order, rule, regulation or requirement to be
complied with by Developer under this Lease and to postpone compliance with the
same except such laws as may be adopted by Landlord, provided such contest shall
be promptly and diligently prosecuted at no expense to Landlord and so long as
Landlord shall not thereby suffer any civil penalties, sanction or be subjected
to any criminal penalties or sanctions, and Developer shall protect and save
harmless Landlord against any liability and claims for any such noncompliance or
postponement of compliance.
109
17.7 Trade Fixtures. All trade fixtures, furnishings,
--------------
equipment and signs installed by or under Developer or subtenants shall be and
remain the property of the person, firm or corporation installing the same and
shall be removable at any time during the term of this Lease. The removal of any
such trade fixtures, furnishings, equipment and signs shall be at the expense of
the person, firm or corporation removing the same, who shall repair any damage
or injury to the Premises and all improvements thereto occasioned by the
removal thereof. In the event that any subtenant acquires any furniture, trade
fixtures, signs and/or equipment to be used in connection with its subleased
premises from an equipment lessor or from an equipment seller under a security
agreement, Landlord agrees to execute such documents as may reasonably be
required by the equipment lessor or creditor in order to assure such party of
its prior rights in and to any such equipment, furniture, signs and/or trade
fixtures and of its right to remove any such equipment, furniture, signs and/or
trade fixtures from the subleased premises for a period of not to exceed forty-
five (45) days from and after notice to such party of the termination or
expiration of the sublease of the subject subtenant-lessee or subtenant-debtor.
17.8 Continued Possession of Developer. If Developer shall
---------------------------------
hold over the Premises after the expiration of the term hereof with the consent
of Landlord, either express or implied, such holding over shall be construed to
be only a tenancy from month-to-month, subject to all the covenants, Ground Rent
conditions and obligations hereof and terminable by either party as provided by
law.
110
17.9 Utilities. Developer shall pay or cause to be paid all charges
---------
for gas, electricity, water and other utilities furnished to the Premises during
the term of this Lease and all sewer use charges or similar charges or
assessments for utilities levied against the Premises for any period included
within the term of this Lease.
17.10 Surrender. Upon the expiration of the term of this Lease, as
---------
provided herein, or sooner termination of this Lease, Developer, subject to
subsection 17.5.11 shall surrender to Landlord, all and singular, the Premises,
including any buildings and all improvements constructed by or under Developer
then situated upon the Premises, and Developer shall execute, acknowledge and
deliver to Landlord within ten (10) days after written request from Landlord to
Developer, a Quitclaim Deed or other document required by any reputable title
company to remove the cloud of this Lease from the Premises. Notwithstanding
the foregoing provisions of this section to the contrary, Developer shall have
the right, at any time not less than six (6) months prior to the expiration of
the term of this Lease and for a period of sixty (60) days following the
expiration of the term to remove all or any portion of the buildings and other
improvements constructed by or under Developer upon the Premises, without
obligation to replace the same with new buildings and/or other improvements as
required by subsection 6.3 above.
17.11 Partial Invalidity. If any term or provision of this Lease or
------------------
the application thereof to any party or circumstances shall, to any extent, be
held invalid or unenforceable, the remainder of this Lease, or the application
of such
111
term or provision, to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
17.12 Section Headings. The section and subsection headings of this
----------------
Lease are inserted as a matter of convenience and reference only and in no way
define, limit or describe the scope or intent of this Lease or in any way affect
the terms and provisions hereof.
17.13 Short Form Lease. Concurrently with the execution and
----------------
delivery of this Lease, Landlord and Developer have executed, acknowledged and
caused to be recorded a short form of this Lease in the form attached hereto as
Exhibit "F".
17.14 Exhibits Incorporated. Exhibit "A" is hereby incorporated
---------------------
in this Lease. No other exhibit is incorporated in the Lease and all exhibits,
other than Exhibit "A", may be changed or modified by agreement between Landlord
and Developer at any time and from time to time without amending this Lease.
17.15 Entire Agreement, Waivers and Amendments. This Lease is
----------------------------------------
executed in three (3) triplicate originals, each of which is deemed to be an
original. It constitutes the entire understanding and agreement of the parties.
This Lease integrates all the terms and conditions mentioned herein or
incidental hereto, and supersedes all negotiations or previous agreements
between the parties with respect to all or any part of the subject matter
hereof.
112
17.16 Waivers. All waivers of the provisions of this Lease must
-------
be in writing by the appropriate authorities of Landlord or Developer, and all
amendments hereto must be in writing by the appropriate authorities of Landlord
and Developer.
17.17 Approvals. Except where specific criteria are set forth as
---------
a condition to approving or disapproving or agreeing upon a matter of course of
action, including but not limited to assignment (subsection 5.4), and subletting
(subsection 5.7.2), in all circumstances where under this Lease either party is
required to approve or disapprove any matter, such approval shall not be
unreasonably withheld, and on matters requiring agreement between Landlord and
Developer, they shall act in good faith.
17.18 Successors in Interest. The provisions of this Lease shall
----------------------
be binding upon and shall inure to the benefit of the heirs, executors, assigns
and successors in interest of the parties hereto.
17.19 "And/Or". Whenever the words and symbols "and/or" are used
--------
in this Lease, it is intended that this Lease be interpreted and the sentence,
phrase or other part be considered in both its conjunctive and disjunctive
sense, and as having been written twice, once with the word "and" inserted, and
once with the word "or" inserted, in the place of said words and symbol
"and/or".
17.20 "Including" Defined. The use of the word "including" or
-------------------
"include", when followed by any general statement, term or matter, will not be
construed to limit such statement, term or matter to the specific items or
matters set forth im-
113
mediately following such work or to similar items, terms or matters, but rather
will be deemed to refer to all other items, terms or matters that could
reasonably fall within the broadest possible scope of such general statement,
term, item or matter.
17.21 Right of First Refusal to Purchase. If Landlord shall
----------------------------------
determine during the term of this Lease that it is lawful and in the public
interest to sell the Premises, or any portion thereof, Landlord shall, prior to
making the Premises or part thereof available for sale to any other party,
provide Developer with the opportunity to purchase said property at its fair
market value, as determined by an appraisal obtained by Landlord. If Developer
has not entered into an agreement to purchase said property within sixty (60)
days of the date it is first offered for sale to Developer at the price
theretofore determined by Landlord to be the fair market value, Landlord may
offer the property for sale on the open market. Provided, however, that if
Landlord should reduce the fair market value of the Premises or part thereof to
be sold by seven and one-half percent (7.5%) or more, Developer's first refusal
rights shall be reinstated. Developer shall respond to any such re-offer within
five (5) business days, and if Developer fails to respond within that time
period Developer's first refusal rights shall terminate. The determination
whether such property shall be made available for sale is and shall be within
the sole and exclusive discretion of Landlord. Landlord shall determine the
legality of such action prior to making a determination to sell on the basis of
the law then in effect.
114
17.22 If Developer is a Trustee. If Developer is a Trustee, this
-------------------------
Lease is executed by the undersigned Trustee, not personally, but solely as
Trustee, and it is expressly understood and agreed by the parties hereto,
anything contained herein to the contrary notwithstanding, that each and all of
the covenants, undertakings, representations and agreements herein made are
intended, not as personal covenants, undertakings, representations and
agreements of the Trustee, individually, or for the purpose of binding the
Trustee personally, but this Lease is executed and delivered by the Trustee
solely in the exercise of the powers conferred upon the Trustee as such Trustee
under the trust agreement and no personal liability or personal responsibility
is assumed by, nor shall at any time be asserted or enforced against said
Trustee on account hereof, or on account of any covenant, undertaking,
representation, warranty or agreement herein contained, either expressed or
implied, and all such personal liability, if any, being hereby expressly waived
and released by the parties hereto, and by all persons claiming by or under said
parties. The provisions of this subsection 17.22 shall apply to any Trustee
succeeding in whole or in part to the interests of Developer hereunder .
17.23 Limitation of Liability of Partners. From and after the
-----------------------------------
completion of the construction of the improvements described in this Lease, if
Developer at any such time shall be a partnership or joint venture, Landlord
shall look solely to the assets of such partnership or joint venture for the
collection or satisfaction of any money judgment which Landlord may recover
against Developer, and Landlord shall not look for the collection
115
or satisfaction of any such judgment to the personal assets of any person who
shall at any time be a partner, joint venturer or participant in or under any
such partnership or joint venture. The provisions of the subsection shall be
binding upon Landlord and each and every future owner of Landlord's interest
under this Lease and shall insure to the benefit of each and every such partner,
joint venturer and participant.
17.24 Approvals. Except as otherwise specifically provided in this
---------
Lease, all approvals to be done by Landlord may be done by Landlord's General
Manager or his designee.
IN WITNESS WHEREOF, Landlord and Developer have signed this Lease as
of the date opposite their signature
BOARD OF WATER COMMISSIONERS OF THE CITY OF LONG
BEACH
4/21, 1988 By: [signature]
---------------------------
4/21, 1988 By: [signature]
---------------------------
LANDLORD
▇▇▇▇▇▇ LONG BEACH ASSOCIATES, a
California limited partnership
By: ▇▇▇▇▇▇ INDUSTRIES, a
California corporation
General Partner
4/11, 1988
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President
DEVELOPER
116
This Lease Agreement is approved as to form this 21ST day of APRIL,
1988.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, City Attorney
By:/s/▇▇▇▇▇▇▇ Allisso
Deputy
RPF/md
3/18/88
D-187A&B
117
DEVELOPER'S ACKNOWLEDGMENT
--------------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES)
On April 11, 1988, before me, the undersigned, a Notary Public in and
-------------
for said State, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ,personally known to me
-------------------
or proved to me on the basis of satisfactory evidence to be the person that
executed this instrument as President of ▇▇▇▇▇▇ Industries, the corporation that
---------
executed this instrument as the general partner of ▇▇▇▇▇▇ Long Beach Associates,
a California Limited Partnership, the partnership that executed the within
instrument, and acknowledged to me that such corporation executed the same as
such partner and that said partnership executed the same.
WITNESS my hand and official seal.
[SEAL] ______________________ [SEAL APPEARS HERE] SEAL
▇▇▇▇▇▇ ▇ ▇▇▇▇
-------------
Notary Public in and for
said County and State
DA-KLBA1
PARCEL A
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89(degrees) 55' 23" WEST 88.37 FEET" IN THE
NORTHERLY BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA,
RECORDED MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506, OFFICIAL
RECORDS; THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH
78(degrees) 19' 22" EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG
AND SOUTH 78(degrees) 55' 01" EAST 83.09 FEET TO A ONE INCH IRON PIPE WITH
CALTRANS TAG; THENCE CONTINUING ALONG SAID NORTHERLY LINE AS MONUMENTED BY ONE
INCH IRON PIPES WITH CALTRANS TAGS SOUTH 80(degrees) 14' 32" EAST 523.56
FEET; THENCE LEAVING SAID NORTHERLY LINE NORTH 9(degrees) 45' 28" EAST 570.00
FEET; THENCE NORTH 25 (degrees) 19' 32" WEST 190.76 FEET; THENCE NORTH
89(degrees) 59' 37" WEST 112.16 FEET; THENCE SOUTH 38(degrees)) 20' 44" WEST
49.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 38(degrees) 20' 44" WEST
---------------------------
146.94 FEET; THENCE SOUTH 31(degrees) 10' 37" WEST 483.95 FEET TO THE BEGINNING
OF A NON-TANGENT CURVE CONCAVE TO THE NORTH HAVING A RADIUS OF 4954.00 FEET AND
TO WHICH BEGINNING A RADIAL LINE BEARS SOUTH l0(degrees) 03' 32" WEST; THENCE
WESTERLY 139.93 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1(degree) 37'
06"; THENCE NORTH 78(degrees) 19' 22" WEST 181.01 FEET; THENCE NORTH 9(degrees)
45' 28" EAST 232.12 FEET; THENCE SOUTH 89(degrees) 53' 11" EAST 233.60 FEET;
THENCE NORTH 53(degrees) 04' 54" EAST 181.74 FEET; THENCE NORTH 0(degree) 16'
54" EAST 129.16 FEET TO THE INTERSECTION WITH A LINE BEARING NORTH 89(degrees)
55' 11" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 89(degrees) 55' 11"
EAST 237.51 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 146,831 SQUARE FEET.
[SEAL APPEARS HERE]
EXHIBIT "A"
Page 1 of 2 Pages
PARCEL B
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89(degrees) 55' 23" WEST 88.37 FEET IN THE NORTHERLY
BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA, RECORDED
MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506, OFFICIAL RECORDS;
THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH 78(degrees) 19'
22" EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG AND SOUTH
78(degrees)) 55' 01" EAST 83.09 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG;
THENCE CONTINUING ALONG SAID NORTHERLY LINE AS MONUMENTED BY ONE INCH IRON PIPES
WITH CALTRANS TAGS SOUTH 80(degrees)) 14' 32" EAST 523.56 FEET; THENCE LEAVING
SAID NORTHERLY LINE NORTH 9(degrees)) 45' 28" EAST 570.00 FEET; THENCE NORTH 25
(degrees)) 19' 32" WEST 190.76 FEET; THENCE NORTH 89(degrees) 59' 37" WEST
112.16 FEET; THENCE SOUTH 38(degrees) 20' 44" WEST 49.52 FEET TO THE TRUE POINT
OF BEGINNING; THENCE NORTH 38(degrees) 20' 44" EAST 120.17 FEET TO THE
INTERSECTION WITH THE SOUTHERLY PROLONGATION OF THE WESTERLY LINE OF PARCEL 4 AS
SHOWN ON A RECORD OF SURVEY IN SAID CITY AS PER MAP FILED IN BOOK 85 PAGE 19 OF
RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE
ALONG THE WESTERLY LINE OF SAID PARCEL AND ITS SOUTHERLY PROLONGATION NORTH
0(degree) 01' 44" EAST 368.59 FEET TO A POINT ON SAID WESTERLY LINE DISTANT
THEREON SOUTHERLY 26.48 FEET FROM THE NORTHWEST CORNER OF PARCEL 4 OF SAID
RECORD OF SURVEY, SAID POINT BEING THE BEGINNING OF A CURVE CONCAVE TO THE
SOUTHWEST HAVING A RADIUS OF 23.00 FEET; THENCE NORTHWESTERLY 33.21 FEET ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 82(degrees) 43' 53" TO THE BEGINNING OF A
REVERSE CURVE CONCAVE TO THE NORTH HAVING A RADIUS OF 1056.00 FEET, SAID CURVE
BEING CONCENTRIC WITH AND DISTANT SOUTHERLY 6.00 FEET FROM THE SOUTHERLY CURVED
SIDE LINE OF SPRING STREET 100.00 FEET WIDE AS SHOWN ON SAID RECORD OF SURVEY;
THENCE WESTERLY 89.13 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF
4(degrees) 50' 10" TO A POINT NORMAL TO THE WESTERLY END OF SAID SOUTHERLY
CURVED PORTION OF THE SIDE LINE OF SAID SPRING STREET; THENCE CONTINUING ON A
LINE PARALLEL TO AND DISTANT SOUTHERLY 6.00 FEET AT RIGHT ANGLES FROM SAID
SOUTHERLY SIDE LINE NORTH 77(degrees) 51' 59" WEST 74.19 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 212.00 FEET; THENCE
LEAVING SAID PARALLEL LINE NORTHWESTERLY 44.57 FEET ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 12(degrees)) 02' 47"; THENCE ON A NON-TANGENT LINE NORTH
66(degrees)) 53' 00" WEST 6.99 FEET TO A POINT ON THE SOUTHERLY SIDE LINE OF
SAID SPRING STREET, 100.00 FEET WIDE; THENCE ALONG SAID SIDE LINE NORTH
77(degrees)) 51' 59" WEST 78.06 FEET TO THE BEGINNING OF A CURVE IN SAID
SOUTHERLY LINE CONCAVE TO THE SOUTH HAVING A RADIUS OF 950.00 FEET; THENCE
WESTERLY 95.65 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 5(degrees) 46'
06"; THENCE LEAVING SAID SIDE LINE SOUTH 0(degrees) 08' 48" WEST 426.86 FEET;
THENCE NORTH 89(degrees) 58' 42" EAST 58.51 FEET; THENCE SOUTH 0(degrees) 16'
54" WEST 176.34 FEET TO THE INTERSECTION WITH A LINE BEARING NORTH 89(degrees)
55' 11" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 89(degrees) 55' 11"
EAST 237.51 FEET TO THE TRUE POINT OF BEGINNING .
CONTAINING 207,752 SQUARE FEET.
[SEAL APPEARS HERE]
EXHIBIT "A"
Page 2 of 2 Pages
[MAP APPEARS HERE]
EXHIBIT "B"
Page 1 of 1 Page
AGREEMENT OF NON-DISTURBANCE
----------------------------
THIS AGREEMENT is made as of the day of
------ --------------,
198__, by and among the BOARD OF WATER COMMISSIONERS OF THE CITY
OF LONG BEACH, acting for and on behalf of the City of Long
Beach, a Municipal Corporation (hereinafter called "Landlord");
▇▇▇▇▇▇ LONG BEACH ASSOCIATES, a California Limited Partnership,
(hereinafter called "Developer"); and
-------------------------
-------------------- (hereinafter called "Subtenant").
PRELIMINARY
-----------
A. Landlord and Developer have entered into a Lease Agreement dated
-----
(hereinafter referred to as the "Ground Lease") pursuant to which Landlord has
demised and leased to Developer certain real property located in the City of
Long Beach, County of Los Angeles, State of California, including the real
property described in Exhibit "A" attached hereto and incorporated herein. A
short form of the Ground Lease was recorded , 198 in the Official
------------ --
Records of said County.
B. Developer, as Sublandlord, and Subtenant, as subtenant, have entered
into a Sublease dated , 198 , (hereinafter referred to as the
------------- --
"Sublease") which Sublease demises to Subtenant a portion of the premises
demised by the
EXHIBIT "C"
Page 1 of 7 Pages
Ground Lease (and grants to Subtenant certain rights with respect to other
portions of the premises demised by the Ground Lease). A short form of the
Sublease is being recorded concurrently herewith in the Official Records of said
County, which short form of Sublease describes the premises demised thereby (and
the other rights and obligations of Subtenant with respect to the real property
described in the attached Exhibit "A").
C. The parties hereto now desire to enter into this Agreement so as to
clarify their rights, duties and obligations under the Ground Lease and the
Sublease and to further provide for various contingencies as hereinafter set
forth.
NOW THEREFORE, in consideration of the foregoing and of the mutual agreement
of the parties hereto to the terms and conditions hereinafter contained, the
parties hereto agree as follows:
1. In the event Developer shall default in the payment of any sum or in the
performance of any covenant or condition of the Ground Lease, all as provided
therein, or in the event of any termination or expiration of the Ground Lease
for any reason whatsoever prior to the expiration of the term of the Sublease as
provided in the Sublease (other than a termination of the Ground Lease only as
to portions of the premises demised thereby not described in the attached
Exhibit "A"), then Landlord, Developer and Subtenant do hereby agree that the
Sublease, and all terms,
EXHIBIT "C"
Page 2 of 7 Pages
provisions, covenants and agreements thereof shall survive any such default or
defaults in, or termination or expiration of the Ground Lease, whether such
termination occurs as a result of, or arising out of, any such default or
defaults, or otherwise, and the Sublease (subject to the rights of any Leasehold
Mortgagee, as defined in the Ground Lease, to enter into a New Lease with
Landlord upon the same terms and conditions and having the same priority as the
Ground Lease, pursuant to subsection 4.8 of the Ground Lease) shall continue in
force and effect in accordance with and subject to all of its terms, provisions,
agreements and covenants as a direct lease with Landlord, as landlord, and
Subtenant, as lessee. Subtenant agrees, in such event, to attorn to Landlord and
to recognize Landlord as the landlord under the Sublease. Landlord shall, in
such event, exercise and undertake all of the rights, obligations and duties of
Developer in and under said Sublease and thereafter shall be entitled to collect
all rents and payments due and payable under said Sublease, including the right
to collect any sums being due and payable thereunder prior to the termination or
expiration of the Ground Lease which are accrued and unpaid by Subtenant on the
date of termination of the Ground Lease. Subtenant agrees not to prepay rentals
under the Sublease beyond the amounts provided in the Sublease without the prior
written consent of Landlord.
2. Landlord agrees that, prior to terminating the Ground Lease or taking
any proceedings to enforce any such termination
EXHIBIT "C"
Page 3 of 7 Pages
thereof for any reason other than the expiration of the term of the Ground Lease
as provided therein, Landlord shall give Subtenant thirty (30) days' notice in
writing prior to the effective date of such termination, specifying the reason
for such termination. Such notice shall be given to Subtenant at the address
provided in the Sublease for notices to Subtenant. Subtenant may change such
address by written notice to Landlord.
3. Landlord hereby approves of the Sublease and of the rights and
privileges granted to Subtenant thereunder and agrees that, for and during the
term of the Sublease and any extensions thereof, Landlord shall not take any
action, directly or indirectly, to disturb or otherwise affect Subtenant's
occupancy of and/or rights and privileges with respect to the premises demised
by the Ground Lease and described on the attached Exhibit "A" so long as
Subtenant is not in default under the Sublease, nor shall Subtenant's exercise
of any such rights or privileges constitute a default under the Ground Lease,
notwithstanding any provisions to the contrary contained in the Ground Lease.
4. No provision contained herein shall be deemed an amendment or
modification of any provision contained in the Sublease, including, without
limiting the generality of the foregoing, any rights given thereunder to
Developer to terminate the Sublease.
EXHIBIT "C"
Page 4 of 7 Pages
5. In the event that the Ground Lease is divided, in accordance with its
terms, into two (2) or more New Leases or Separate Leases, the term "Ground
Lease", as used herein, shall be deemed to refer to the said New Lease or
Separate Lease leasing and demising the subleased premises.
6. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their successors, transferees and assigns.
THIS SPACE INTENTIONALLY LEFT BLANK
EXHIBIT "C"
Page 5 of 7 Pages
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first hereinabove set forth.
BOARD OF WATER COMMISSIONERS OF THE
CITY OF LONG BEACH
By: _______________________________
Title: ____________________________
▇▇▇▇▇▇ LONG BEACH ASSOCIATES,
A California Limited Partnership
By: ▇▇▇▇▇▇ INDUSTRIES, a California
Corporation, General Partner
By: ________________________________
Title: _____________________________
"Developer"
____________________________________
____________________________________
"Subtenant"
EXHIBIT "C"
Page 6 of 7 Pages
This Agreement is hereby approved as to form this
day of ________________________, 198__.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Deputy City Attorney
By:_______________________
"Deputy"
EXHIBIT "C"
Page 7 of 7 Pages
PARCEL A
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89(degrees) 55' 23" WEST 88.37 FEET" IN THE
NORTHERLY BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA,
RECORDED MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506, OFFICIAL
RECORDS; THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH
78(degrees) 19' 22" EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG
AND SOUTH 78(degrees) 55' 01" EAST 83.09 FEET TO A ONE INCH IRON PIPE WITH
CALTRANS TAG; THENCE CONTINUING ALONG SAID NORTHERLY LINE AS MONUMENTED BY ONE
INCH IRON PIPES WITH CALTRANS TAGS SOUTH 80(degrees) 14' 32" EAST 523.56 FEET;
THENCE LEAVING SAID NORTHERLY LINE NORTH 9(degrees) 45' 28" EAST 570.00 FEET;
THENCE NORTH 25(degrees) 19' 32" WEST 190.76 FEET; THENCE NORTH 89(degrees)
59' 37" WEST 112.16 FEET; THENCE SOUTH 38(degrees) 20' 44" WEST 49.52 FEET TO
THE TRUE POINT OF BEGINNING; THENCE SOUTH 38(degrees) 20' 44" WEST 146.94 FEET;
---------------------------
THENCE SOUTH 31(degrees) 10' 37" WEST 483.95 FEET TO THE BEGINNING OF A NON-
TANGENT CURVE CONCAVE TO THE NORTH HAVING A RADIUS OF 4954.00 FEET AND TO WHICH
BEGINNING A RADIAL LINE BEARS SOUTH 10(degrees) 03' 32" WEST; THENCE WESTERLY
139.93 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1(degree) 37' 06";
THENCE NORTH 78(degrees) 19' 22" WEST 181.01 FEET; THENCE NORTH 9(degrees)
45' 28" EAST 232.12 FEET; THENCE SOUTH 89(degrees) 53' 01" EAST 233.60 FEET;
THENCE NORTH 53(degrees) 04' 54" EAST 181.74 FEET; THENCE NORTH 0(degrees)
16' 54" EAST 129.16 FEET TO THE INTERSECTION WITH A LINE BEARING NORTH
89(degrees) 55' 11" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH
89(degrees) 55' 11" EAST 237.51 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 146,831 SQUARE FEET.
[SEAL APPEARS HERE]
EXHIBIT A
To
EXHIBIT C
Page 1 of 3 Pages
PARCEL B
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89(degrees) 55' 23" WEST 88.37 FEET IN THE NORTHERLY
BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA, RECORDED
MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506, OFFICIAL RECORDS;
THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH 78(degrees)
19' 22" EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG AND SOUTH
78(degrees) 55' 01" EAST 83.09 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG;
THENCE CONTINUING ALONG SAID NORTHERLY LINE AS MONUMENTED BY ONE INCH IRON PIPES
WITH CALTRANS TAGS SOUTH 80(degrees) 14' 32" EAST 523.56 FEET; THENCE LEAVING
SAID NORTHERLY LINE NORTH 9(degrees) 45' 28" EAST 570.00 FEET; THENCE NORTH
25(degrees) 19' 32" WEST 190.76 FEET; THENCE NORTH 89(degrees) 59' 37" WEST
112.16 FEET; THENCE SOUTH 38(degrees) 20' 44" WEST 49.52 FEET TO THE TRUE POINT
OF BEGINNING; THENCE NORTH 38(degrees) 20' 44" EAST 120.17 FEET TO THE
INTERSECTION WITH THE SOUTHERLY PROLONGATION OF THE WESTERLY LINE OF PARCEL 4 AS
SHOWN ON A RECORD OF SURVEY IN SAID CITY AS PER MAP FILED IN BOOK 85 PAGE 19 OF
RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE
ALONG THE WESTERLY LINE OF SAID PARCEL AND ITS SOUTHERLY PROLONGATION NORTH
0(degrees) 01' 44" EAST 368.59 FEET TO A POINT ON SAID WESTERLY LINE DISTANT
THEREON SOUTHERLY 26.48 FEET FROM THE NORTHWEST CORNER OF PARCEL 4 OF SAID
RECORD OF SURVEY, SAID POINT BEING THE BEGINNING OF A CURVE CONCAVE TO THE
SOUTHWEST HAVING A RADIUS OF 23.00 FEET; THENCE NORTHWESTERLY 33.21 FEET ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 82(degrees) 43' 53" TO THE BEGINNING OF A
REVERSE CURVE CONCAVE TO THE NORTH HAVING A RADIUS OF 1056.00 FEET, SAID CURVE
BEING CONCENTRIC WITH AND DISTANT SOUTHERLY 6.00 FEET FROM THE SOUTHERLY CURVED
SIDE LINE OF SPRING STREET 100.00 FEET WIDE AS SHOWN ON SAID RECORD OF SURVEY;
THENCE WESTERLY 89.13 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF
4(degrees) 50' 10" TO A POINT NORMAL TO THE WESTERLY END OF SAID SOUTHERLY
CURVED PORTION OF THE SIDE LINE OF SAID SPRING STREET; THENCE CONTINUING ON A
LINE PARALLEL TO AND DISTANT SOUTHERLY 6.00 FEET AT RIGHT ANGLES FROM SAID
SOUTHERLY SIDE LINE NORTH 77(degrees) 51' 59" WEST 74.19 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 212.00 FEET; THENCE
LEAVING SAID PARALLEL LINE NORTHWESTERLY 44.57 FEET ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 12(degrees) 02' 47"; THENCE ON A NON-TANGENT LINE NORTH
66(degrees) 53' 00" WEST 6.99 FEET TO A POINT ON THE SOUTHERLY SIDE LINE OF
SAID SPRING STREET, 100.00 FEET WIDE; THENCE ALONG SAID SIDE LINE NORTH
77(degrees) 51' 59" WEST 78.06 FEET TO THE BEGINNING OF A CURVE IN SAID
SOUTHERLY LINE CONCAVE TO THE SOUTH HAVING A RADIUS OF 950.00 FEET; THENCE
WESTERLY 95.65 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 5(degrees)
46' 06"; THENCE LEAVING SAID SIDE LINE SOUTH 0(degrees) 08' 48" WEST 426.86
FEET; THENCE NORTH 89(degrees) 58' 42" EAST 58.51 FEET; THENCE SOUTH 0(degrees)
16' 54" WEST 176.34 FEET TO THE INTERSECTION WITH A LINE BEARING NORTH
89(degrees) 55' 11" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH
89(degrees) 55' 11" EAST 237.51 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 207,752 SQUARE FEET.
[SEAL APPEARS HERE]
EXHIBIT A
TO
EXHIBIT C
Page 2 of 3 Pages
[MAP APPEARS HERE]
EXHIBIT A
To
EXHIBIT C
Page 3 of 3 Pages
BOND NO.:________
PERFORMANCE BOND PREMIUM :________
----------------
KNOW ALL MEN BY THESE PRESENTS, That we ________________________________________
______________________________, as Principal, and _____________________________
_______________________________________________, as Surety, are held and firmly
bound unto the Board of Water Commissioners of the City of Long Beach, acting on
behalf of the City of Long Beach, a Municipal Corporation (Land Lessor) and
▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership (Land Lessee), as
Obligees, in the penal sum of __________________________________________________
_________________________________________________DOLLARS ($ ) lawful money of
the United States, for the payment of which sum truly to be made, we bind
ourselves, our heirs, executors, administrators, successors and assigns, jointly
and severally, firmly by these presents.
THE CONDITION OF THE OBLIGATION IS SUCH, That Whereas, the Principal entered
into a certain agreement which is hereto attached and made a part hereof, with
▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, dated __________
_______________, for ___________________________________________________________
which contract and the specifications and general conditions thereof are hereby
incorporated herein and shall be deemed a part hereof as fully as if set out
herein.
NOW, THEREFORE, if the said Principal shall fully indemnify and save harmless
the Obligees from all loss, liability, costs, damages, penalty, attorney's fees
or expenses which Obligees may incur by reason of failure to well and truly keep
and perform each, every and all of the terms and conditions of said agreement on
the part of the said Principal to be kept and performed, including but not
limited to completion within the time specified of all work covered by said
agreement, performance of all obligation and guarantees of ▇▇▇▇▇▇ Long Beach
Associates, a California Limited Partnership, relating to such work under the
contract with ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership;
then this obligation shall be of no effect, but otherwise it shall remain in
full force and effect.
It is a condition hereof that any change, alteration, modification or amendment
of any nature whatsoever that may be made in the terms of said agreement, any
change in the character or scope of the work to be performed, or the method of
performance, under said agreement or modification of said agreement or in the
time for completion thereof, any change in the manner, time or amount of payment
as provided therein, any change of any nature whatsoever that may be made in the
terms of the contract
EXHIBIT "D"
Page 1 of 6 Pages
with ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, or any
change that may be made in the performance of the work under said agreement by
the Principal, assented to by ▇▇▇▇▇▇ Long Beach Associates, a California Limited
Partnership, whether made under express agreement or not, may be made without
notice to the Surety and without affecting the obligations of the Surety on this
bond and without requiring the consent of the Surety, and no such change or
changes shall release the Surety from any of its obligations hereunder, the
Surety hereby consenting to and waiving notice of any such change, alteration,
modification or amendment.
It is a further condition hereof that no one other than the named Obligees and
the successors, administrators or assigns of the Obligees shall have any right
of action under this bond.
IN WITNESS WHEREOF, the said Principal and Surety have hereunto set their hands
and seals this _____________ day of ___________________, 19__.
__________________________________________________
(Principal)
BY:_______________________________________________
__________________________________________________
(Surety)
BY:_______________________________________________
Note: The name "▇▇▇▇▇▇ Long Beach Associates, a California Limited
Partnership" would change to the name of any successor Land Lessee.
EXHIBIT "D"
Page 2 of 6 Pages
PAYMENT BOND BOND NO.:________
------------ PREMIUM :________
KNOW ALL MEN BY THESE PRESENTS, That we ________________________________________
_________________________________ as Principal, and ___________________________
___________________________________________, as Surety, are held and firmly
bound unto the Board of Water Commissioners of the City of Long Beach, acting
for and on behalf of the City of Long Beach, a Municipal Corporation (Land
Lessor) and ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership
(Land Lessee), as Obligees, in the penal sum of ________________________________
______________________________________________________________ DOLLARS ($ ),
lawful money of the United States, for the payment of which sum well and truly
to be made, we bind ourselves, our heirs, executors, administrators, successors
and assigns, jointly and severally, firmly by these presents.
THE CONDITION OF THE OBLIGATION IS SUCH, That Whereas, the Principal entered
into a certain agreement which is hereto attached and made a part hereof, with
▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, dated _________
________________________________, for _________________________________________
which contract and the specifications and general conditions thereof are hereby
incorporated herein and shall be deemed a part hereof as fully as if set out
herein.
NOW, THEREFORE, if the said Principal shall pay promptly and in full the claims
of all persons, firms or corporations, performing labor or furnishing equipment,
materials, or supplies incurred in connection with the contract to be performed
under said agreement and shall indemnify and save harmless of Obligees from all
loss liability, costs, damages, penalty, attorney's fees or expenses for all
taxes, insurance premiums, any and all applicable contributions, allowances or
other payments or deductions, however harmed, required by statute or union labor
agreement, including voluntary payment thereof by the Obligees necessary to
insure orderly prosecution of work or other items or services used in, upon or
for or incurred in connection with the contract to be performed under said
agreement, then this obligation shall be of no effect, but otherwise it shall
remain in full force and effect.
It is a condition hereof that any change, alteration, modification or amendment
of any nature whatsoever that may be made in the terms of said agreement, any
change in the character or scope of the work to be performed, or the method of
performance, under said agreement or any change in manner, time
EXHIBIT "D"
Page 3 of 6 Pages
or amount of payment as provided therein, any change of any nature whatsoever
that may be made in the terms of the contract between ▇▇▇▇▇▇ Long Beach
Associates, a California Limited Partnership, or any change that may be made in
the performance of the work under said agreement by the Principal, assented to
by ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, whether made
under express agreement or not, may be made without notice to the Surety and
without affecting the obligations of the Surety on this bond and without
requiring the consent of the Surety and no such change or changes shall release
the Surety from any of its obligations hereunder, the Surety hereby consenting
to and waiving notice of any such change, alteration, modification or amendment.
Subject to the priority of the named Obligees with respect to recovery up to the
penal sum of this bond, persons who have supplied or furnished labor, material,
machinery, equipment or supplies to the Principal for use in the prosecution of
the work provided for in said contract shall have a direct right of action
against said Principal and Surety under this bond.
IN WITNESS WHEREOF, the said Principal and Surety have hereunto set their hands
and seals, this ____ day of ____________________, 19__.
_________________________________________________
(Principal)
BY:______________________________________________
_________________________________________________
(Surety)
BY:______________________________________________
Note: The name "▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership"
would change to the name of any successor Land Lessee.
EXHIBIT "D"
Page 4 of 6 Pages
LENDER'S OBLIGEE RIDER TO PERFORMANCE BOND
------------------------------------------
WHEREAS, heretofore, on or about the ______ day of _____________,
19__, ______________________________________________________________,
as Contractor, entered into a written agreement with ▇▇▇▇▇▇ Long Beach
Associates, a California Limited Partnership, as Owner of leasehold
improvements, for the construction of _____________________________
____________________________________________________________________,
and
WHEREAS, the Contractor and _____________________________________
_______________, a California corporation, as Surety, executed and delivered
to ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, their joint
and several Performance Bond, and
WHEREAS, ▇▇▇▇▇▇ Long Beach Associates, a California Limited Partnership, has
arranged for a loan for the exclusive purpose of payment for the performance of
said contract and has requested the Contractor and Surety to join with ▇▇▇▇▇▇
Long Beach Associates, a California Limited Partnership, in the execution and
delivery of this Rider, and the Contractor and Surety have agreed so to do upon
the condition herein stated.
NOW, THEREFORE, in consideration of one dollar and other good and valuable
consideration receipt of which is acknowledged, the undersigned agree that the
said Performance Bond shall be, and is, amended as follows:
1. The name of __________________________________________________,
as shall be added to said bond as a named Obligee.
2. The rights of the Lender as a named Obligee shall be subject to the
condition precedent that ▇▇▇▇▇▇ Long Beach Associates, a California
Limited Partnership, obligations to the Contractor be performed.
3. The aggregate liability of the Surety under said bond to ▇▇▇▇▇▇ Long
Beach Associates, a California Limited Partnership, and the Lender, as
their interests may appear, is limited to the penal sum of the said
bond.
4. The Surety may, at its option, make any payment under said bond by
check issued jointly to ▇▇▇▇▇▇ Long Beach Associates, a California
Limited Partnership, and the Lender.
5. Except as herein modified, said Performance Bond shall be and remain in
full force and effect.
EXHIBIT "D"
Page 5 of 6 Pages
Signed, sealed and dated this ______ day of _____________________,
19__.
▇▇▇▇▇▇ LONG BEACH ASSOCIATES, A
California Limited Partnership
ATTEST:_____________________________ BY: ▇▇▇▇▇▇ INDUSTRIES, a
California Corporation,
General Partner
By: ______________________
Title: ___________________
By: __________________________
By: __________________________
(Owner)
ATTEST:_____________________________ BY: __________________________
__________________________
(Surety)
ATTEST:_____________________________ BY: __________________________
__________________________
(Contractor)
EXHIBIT "D"
Page 6 of 6 Pages
ASSIGNMENT OF LEASE
-------------------
THIS ASSIGNMENT OF LEASE ("Assignment") is made by the BOARD OF WATER
COMMISSIONERS of the CITY OF LONG BEACH ("Assignor"), whose address is ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to ▇▇▇▇▇▇ LONG BEACH
ASSOCIATES, a California Limited Partnership ("Assignee"), whose address is ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and is made
with reference to the following facts and objectives:
RECITALS
--------
A. Assignor, acting in the capacity of and therein referred
to as "Lessor", entered into a written lease, dated ____________
________________, 19___ (the "Lease"), in which Assignor leased to
__________________________________________________________________
________________, a ___________________________________, acting in
the capacity of and therein referred to as Lessee ("Lessee"), certain
premises located in the City of Long Beach, County of Los Angeles,
California, as said premises are more particularly described in Exhibit
"A", attached hereto and by this reference incorporated herein (the
"Leased Premises").
B. Assignor, acting in the capacity of and therein described as "Landlord",
has entered into a Lease Agreement with
EXHIBIT "E"
Page 1 of 4 Pages
Assignee, acting in the capacity of and therein referred to as "Developer",
dated April _______, 1988 (the "Master Lease"). The Master Lease includes the
Leased Premises and other premises. The Master Lease provides in Section 5.9
that Assignor shall assign to Assignee all previously existing leases of the
premises demised by the Master Lease.
C. This Assignment is executed to carry out the provisions of Section 5.9
of the Master Lease and to assign to Assignee the Lease.
NOW THEREFORE, Assignor assigns and transfers to Assignee all of Assignor's
right, title and interest in the Lease, and Assignee accepts the assignment and
assumes and agrees to perform, from the date this Assignment becomes effective,
all the provisions of the Lease. This Assignment is made on the following
additional covenants and conditions.
1. Effective Date of Assignment. This Assignment shall take effect
----------------------------
concurrently with the effective date of the Master Lease on April ____, 1988.
2. Assignee To Hold Assignor Harmless. Assignee shall hold Assignor and
----------------------------------
the City of Long Beach, and all of their officers and employees, free and
harmless from any cost, expense, damage or claim of damage, including costs of
defense, arising from the interests or asserted interests of Lessee arising
subsequent to the Effective Date of this Assignment.
EXHIBIT "E"
Page 2 of 4 Pages
3. Assignor To Hold Assignee Harmless. Assignor shall hold Assignee free
----------------------------------
and harmless from any cost, expense, damage or claim of damage including costs
of defense, arising from acts or events related to the Lease or the Leased
Premises and occurring prior to the Effective Date of this Assignment, unless
such damage or claim of damage is caused or alleged to be caused by this
Assignment or any related transaction.
4. Successors-in-Interest. The provisions of this Assignment shall be
----------------------
binding upon and shall inure to the benefit of the heirs, executors, assigns and
successors-in-interest of the parties hereto.
INTENTIONALLY LEFT BLANK
SIGNATURES ON PAGE 4
EXHIBIT "E"
Page 3 of 4 Pages
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on
the date opposite their signatures and as of the Effective Date set forth
herein.
BOARD OF WATER COMMISSIONERS OF THE
CITY OF LONG BEACH
________________, 1988 By: __________________________________
Title: _______________________________
"ASSIGNOR"
▇▇▇▇▇▇ LONG BEACH ASSOCIATES,
A California limited partnership
By: ▇▇▇▇▇▇ INDUSTRIES,
A California corporation,
General Partner
________________, 1988 By: ______________________________
Title: ___________________________
"ASSIGNEE"
EXHIBIT "E"
Page 4 of 4 Pages
Recording Requested By
When Recorded Mail To:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SHORT FORM GROUND LEASE
-----------------------
THIS SHORT FORM GROUND LEASE is made and entered into as of this ___________
day of __________________, 198___, by and between BOARD OF WATER COMMISSIONERS
OF THE CITY OF LONG BEACH, acting for and on behalf of the City of Long Beach, a
municipal corporation ("Landlord"), and ▇▇▇▇▇▇ LONG BEACH ASSOCIATES, a
California Limited Partnership ("Developer").
R E C I T A L S
- - - - - - - -
Landlord does hereby lease and demise to Developer that certain real
property in the City of Long Beach, County of Los Angeles, State of California,
more particularly described in Exhibit "A" attached hereto and all rights,
privileges and easements appurtenant thereto ("Premises" herein) pursuant to and
upon all of the terms, covenants and provisions set forth in that certain
unrecorded Ground Lease dated ____________________________________, ("Ground
Lease" herein), the terms, covenants and provisions of which are hereby
incorporated herein and made a part hereof by reference.
EXHIBIT "F"
Page 1 of 7 Pages
Landlord and Developer do further agree as follows:
1. The commencement date of the Ground Lease term is the date first written
above.
2. The term of the Ground Lease shall continue for approximately forty-
seven (47) years following the date of execution of the Ground Lease, until
July 17, 2035, subject to earlier termination as provided in the Ground Lease
and subject to four (4) successive ten (10) year options and one (l) nine (9)
year option to further extend the term of the Ground Lease.
3. Developer shall have the right to subdivide the Ground Lease into one or
more separate Ground Leases pursuant to Section 7.6 of the Ground Lease and to
recombine one or more separate Ground Lease into a single Ground Lease pursuant
to Section 7.7 of the Ground Lease. Developer also shall have the right to
encumber its leasehold interest in the Ground Lease (and in each separate Ground
Lease into which the Ground Lease may be subdivided) with one or more Leasehold
Mortgages (as defined in section 4.3.2 of the Ground Lease) in favor of one or
more Leasehold Mortgagees (as defined in section 4.3.3 of the Ground Lease).
4. Developer shall pay the real property taxes and assessments against the
Premises during the term hereof, as more specifically provided in the Ground
Lease.
5. Notwithstanding that the ownership of Landlord's and Developer's estates
in and to the Premises may become vested in
EXHIBIT "F"
Page 2 of 7 Pages
the same party for any reason, no merger of Developer's leasehold estate into
Landlord's fee title shall result or be deemed to result thereby, as provided in
Section 4.20 of the Ground Lease, provided that this provision shall not be
deemed applicable to a termination of Developer's leasehold estate by reason of
Developer's default or a taking under the power of eminent domain.
6. The Ground Lease grants to Developer the right to enter upon the
Premises demised thereby for a period of sixty (60) days following the
expiration of the term of the Ground Lease in order to remove any or all of the
buildings and other improvements constructed upon said Premises by or under
Developer.
7. The Ground Lease grants to Developer the right to sell any buildings
from time to time constructed upon the Premises, provided that such buildings
shall be and remain subject to the terms and conditions of the Ground Lease and
shall be used and developed only in accordance with the Ground Lease for so long
as such buildings remain upon the Premises.
EXHIBIT "F"
Page 3 of 7 Pages
IN WITNESS WHEREOF, the parties have executed this Short Form Ground Lease
as of the day and year first above written.
BOARD OF WATER COMMISSIONER OF
THE CITY OF LONG BEACH,
By: ____________________________
Title: _________________________
"Landlord"
▇▇▇▇▇▇ LONG BEACH ASSOCIATES,
a California Limited Partnership,
By: ▇▇▇▇▇▇ INDUSTRIES,
a California Corporation,
General Partner
By: ________________________
Title: _____________________
"Developer"
EXHIBIT "F"
Page 4 of 7 Pages
This Short Form Ground Lease is hereby approved as to form this ____ day
of ________________, 19___.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, City Attorney
By: __________________________
Deputy
EXHIBIT "F"
Page 5 of 7 Pages
LANDLORD'S ACKNOWLEDGMENT
-------------------------
Corporation
-----------
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On ________________, 1988, before me, the undersigned, a Notary Public in
and for said State, personally appeared _______________________________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person who executed the within instrument as the ______________________,
on behalf of the Board of Water Commissioners of the City of Long Beach, the
Municipal corporation that executed the within instrument and acknowledged to me
that said Municipal corporation executed the within instrument pursuant to a
resolution of its City Council.
WITNESS my hand and official seal.
______________________________
Notary Public in and for said
State
SEAL
EXHIBIT "F"
Page 6 of 7 Pages
DEVELOPER'S ACKNOWLEDGEMENT
---------------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On June ____, 1985, before me, the undersigned, a Notary Public in and for
said State, personally appeared _______________________________________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person who executed this instrument as _________________________________
of ▇▇▇▇▇▇ Industries, the corporation that executed this instrument as the
general partner of ▇▇▇▇▇▇ Long Beach Associates, a California Limited
Partnership, the partnership that executed the within instrument, and
acknowledged to me that such corporation executed the same as such partner and
that said partnership executed the same.
WITNESS my hand and official seal.
______________________________
Notary Public in and for said
State
SEAL
EXHIBIT "F"
Page 7 of 7 Pages
PARCEL A
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89(degrees) 55' 23" WEST 88.37 FEET" IN THE
NORTHERLY BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA,
RECORDED MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506, OFFICIAL
RECORDS; THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH
78(degrees) 19' 22" EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH CALTRANS TAG
AND SOUTH 78(degrees) 55' 01,' EAST 83.09 FEET TO A ONE INCH IRON PIPE WITH
CALTRANS TAG; THENCE CONTINUING ALONG SAID NORTHERLY LINE AS MONUMENTED BY ONE
INCH IRON PIPES WITH CALTRANS TAGS SOUTH 80(degrees) 14' 32" EAST 523.56 FEET;
THENCE LEAVING SAID NORTHERLY LINE NORTH 9(degrees) 45' 28" EAST 570.00 FEET;
THENCE NORTH 25(degrees) 19' 32" WEST 190.76 FEET; THENCE NORTH 89(degrees)
59' 37" WEST 112.16 FEET; THENCE SOUTH 38(degrees) 20' 44" WEST 49.52 FEET TO
THE TRUE POINT OF BEGINNING; THENCE SOUTH 38(degrees) 20' 44" WEST 146.94 FEET;
---------------------------
THENCE SOUTH 31(degrees) 10' 37" WEST 483.95 FEET TO THE BEGINNING OF A NON-
TANGENT CURVE CONCAVE TO THE NORTH HAVING A RADIUS OF 4954.00 FEET AND TO WHICH
BEGINNING A RADIAL LINE BEARS SOUTH l0(degrees) 03' 32" WEST; THENCE WESTERLY
139.93 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1(degree) 37' 06";
THENCE NORTH 78(degrees) 19' 22" WEST 181.01 FEET; THENCE NORTH 9(degrees) 45'
28" EAST 232.12 FEET; THENCE SOUTH 89(degrees) 53' 01" EAST 233.60 FEET; THENCE
NORTH 53(degrees) 04' 54" EAST 181.74 FEET; THENCE NORTH 0(degree) 16' 54" EAST
129.16 FEET TO THE INTERSECTION WITH A LINE BEARING NORTH 89(degrees) 55' 11"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 89(degrees) 55' 11" EAST
237.51 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 146,831 SQUARE FEET.
EXHIBIT A
To
EXHIBIT F
Page 1 of 3 Pages
PARCEL B
THAT PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 174 PAGE 15, ET.
SEQ., OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ALONG WITH
THAT PORTION OF RANCHO LOS CERRITOS IN SAID CITY, AS PER MAP RECORDED IN BOOK 2,
PAGES 202 THROUGH 205 OF PATENTS IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:
BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED AS HAVING A
BEARING AND LENGTH OF NORTH 89 DEGREES 55 MINUTES 23 SECONDS WEST 88.37 FEET IN
THE NORTHERLY BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF
CALIFORNIA, RECORDED MAY 11, 1959 AS INSTRUMENT NO. 1870 IN BOOK D-462 PAGE 506,
OFFICIAL RECORDS; THENCE ALONG SAID NORTHERLY LINE THE FOLLOWING COURSES: SOUTH
78 DEGREES 19 MINUTES 22 SECONDS EAST 502.94 FEET TO A ONE INCH IRON PIPE WITH
CALTRANS TAG AND SOUTH 78 DEGREES 55 MINUTES 01 SECONDS EAST 83.09 FEET TO A ONE
INCH IRON PIPE WITH CALTRANS TAG; THENCE CONTINUING ALONG SAID NORTHERLY LINE AS
MONUMENTED BY ONE INCH IRON PIPES WITH CALTRANS TAGS SOUTH 80 DEGREES 14 MINUTES
32 SECONDS EAST 523.56 FEET; THENCE LEAVING SAID NORTHERLY LINE NORTH 9 DEGREES
45 MINUTES 28 SECONDS EAST 570.00 FEET; THENCE NORTH 25 DEGREES 19 MINUTES 32
SECONDS WEST 190.76 FEET; THENCE NORTH 89 DEGREES 59 MINUTES 37 SECONDS WEST
112.16 FEET; THENCE SOUTH 38 DEGREES 20 MINUTES 44 SECONDS WEST 49.52 FEET TO
THE TRUE POINT OF BEGINNING; THENCE NORTH 38 DEGREES 20 MINUTES 44 SECONDS EAST
120.17 FEET TO THE INTERSECTION WITH THE SOUTHERLY PROLONGATION OF THE WESTERLY
LINE OF PARCEL 4 AS SHOWN ON A RECORD OF SURVEY IN SAID CITY AS PER MAP FILED IN
BOOK 85 PAGE 19 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY; THENCE ALONG THE WESTERLY LINE OF SAID PARCEL AND ITS SOUTHERLY
PROLONGATION NORTH O DEGREES 01 MINUTES 44 SECONDS EAST 368.59 FEET TO A POINT
ON SAID WESTERLY LINE DISTANT THEREON SOUTHERLY 26.48 FEET FROM THE NORTHWEST
CORNER OF PARCEL 4 OF SAID RECORD OF SURVEY, SAID POINT BEING THE BEGINNING OF A
CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 23.00 FEET; THENCE
NORTHWESTERLY 33.21 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 82 DEGREES
43 MINUTES 53 SECONDS TO THE BEGINNING OF A REVERSE CURVE CONCAVE TO THE NORTH
HAVING A RADIUS OF 1056.00 FEET, SAID CURVE BEING CONCENTRIC WITH AND DISTANT
SOUTHERLY 6.00 FEET FROM THE SOUTHERLY CURVED SIDE LINE OF SPRING STREET 100.00
FEET WIDE AS SHOWN ON SAID RECORD OF SURVEY; THENCE WESTERLY 89.13 FEET ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 4 DEGREES 50 MINUTES 10 SECONDS TO A POINT
NORMAL TO THE WESTERLY END OF SAID SOUTHERLY CURVED PORTION OF THE SIDE LINE OF
SAID SPRING STREET; THENCE CONTINUING ON A LINE PARALLEL TO AND DISTANT
SOUTHERLY 6.00 FEET AT RIGHT ANGLES FROM SAID SOUTHERLY SIDE LINE NORTH 77
DEGREES 51 MINUTES 59 SECONDS WEST 74.19 FEET TO THE BEGINNING OF A CURVE
CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 212.00 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTHWESTERLY 44.57 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE
OF 12 DEGREES 02 MINUTES 47 SECONDS; THENCE ON A NON-TANGENT LINE NORTH 66
DEGREES 53 MINUTES 00 SECONDS WEST 6.99 FEET TO A POINT ON THE SOUTHERLY SIDE
LINE OF SAID SPRING STREET, 100.00 FEET WIDE; THENCE ALONG SAID SIDE LINE NORTH
77 DEGREES 51 MINUTES 59 SECONDS WEST 78.06 FEET TO THE BEGINNING OF A CURVE IN
SAID SOUTHERLY LINE CONCAVE TO THE SOUTH HAVING A RADIUS OF 950.00 FEET; THENCE
WESTERLY 95.65 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 5 DEGREES 46
MINUTES 06 SECONDS; THENCE LEAVING SAID SIDE LINE SOUTH 0 DEGREES 08 MINUTES 48
SECONDS WEST 426.86 FEET; THENCE NORTH 89 DEGREES 58 MINUTES 42 SECONDS EAST
58.51 FEET; THENCE SOUTH 0 DEGREES 16 MINUTES 54 SECONDS WEST 176.34 FEET TO THE
INTERSECTION WITH A LINE BEARING NORTH 89 DEGREES 55 MINUTES 11 SECONDS WEST
FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 89 DEGREES 55 MINUTES 11 SECONDS
EAST 237.51 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 207,752 SQUARE FEET.
[SEAL HERE]
EXHIBIT A
To
EXHIBIT F
Page 2 of 3 Pages
PARCEL B
